Individuals face minimum fine of £100,000 for insider trading as FSA cracks down
Individuals face a minimum fine of £100,000 for insider trading, while companies could be hit with a penalty of up to £50m – under radical plans being drawn up by the Financial Services Authority.
By Richard Fletcher, Executive editor
Published: 5:46AM BST 07 Jul 2009
telegraph.co.uk
The proposals to triple the fines that can be imposed by the regulator is part of a wider crackdown on insider dealing.
"By hitting companies and individuals in the pocket where it hurts, the fines will be a stark warning to others on what they can expect to pay for flouting our rules," said Margaret Cole, director of enforcement at the FSA.
Individuals found guilty of market abuse offences such as insider dealing would face a minimum penalty of £100,000, while those guilty of other breaches would have to hand over up to 40pc of their salary and bonuses.
Companies that break the rules would be fined up to 20pc of the income they make from the relevant product or activity.
Neill Blundell, partner and head of fraud group at international law firm Eversheds, believes companies could face fines of up to £50m. "The message being sent out to business is get your house in order or expect financial hardship," said Mr Blundell.
The FSA imposed a total of £28.4m in fines in the year to 31 March 2009, up from £4.5m in the preceding year.
Fines are retained by the FSA, although the regulator reduces its levy on financial companies by the amount raised.
As part of its crackdown on insider trading the FSA is hiring 280 new staff.
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