PUB Punch Tvns

The fallout from alleged insider trading at U.S. Greenlight Capital Inc. continued Thursday when the Financial Services Authority said it had fined former Merrill Lynch executive Andrew Osborne GBP350,000 for disclosing inside information ahead of a significant equity fund-raising by pub operator Punch Taverns PLC (PUB.LN) in June 2009.

Osborne, acting on behalf of Punch, approached Greenlight, a major investor and despite being told that the company didn't want to be given privileged information, or "wall-crossed," went ahead with a conference call with Greenlight owner and President David Einhorn during which he disclosed that Punch was within a week of a substantial fund-raising, the FSA said.

The FSA said that Osborne became aware soon after the call that Greenlight was selling Punch shares but failed to raise his concerns with anyone or take any steps to prevent the risk of market abuse. Days later, Punch announced a GBP375 million raising and its shares fell by 30%. Greenlight's sales ahead of the raising meant it avoided losses of around GBP5.8 million.

"Osborne was a highly experienced broker in a position of considerable responsibility at a leading financial institution. He was trusted as the gatekeeper of inside information and should have been extremely cautious in proceeding with the call with Greenlight in light of the clear legal and regulatory risks involved," FSA enforcer Tracey McDermott said.

"By disclosing inside information, Osborne engaged in serious market abuse. His actions undermined the orderliness and integrity of the market and the high penalty reflects the seriousness of his breach," she added.

Osborne's penalty follows those imposed January on Greenlight and Einhorn for their part in the alleged insider trading--GBP3.6 million each and in the case of Einhorn one of the highest fines leveled on an individual in the history the FSA, which has undergone a drive in recent years to get tough on white-collar crime.

Osborne responded Thursday, saying that he thought his fine was disproportionate and unfair but wanted to draw a line under the incident and move on.

"Whilst I decided not to pursue proceedings against the FSA in order to draw a line under this very long, arduous and time-consuming process, I do not believe that the FSA's decision represents a fair outcome," he said in a statement.

"Throughout the transaction in question, I followed proper procedures at all times and acted in accordance with legal advice," he added.

This happened while Osborne was a managing director in corporate broking at Merrill Lynch International, now Bank of America Merrill Lynch International (BAC). Osborne left the bank by mutual agreement six weeks ago and is currently looking at a number of employment options.

Wall-crossing is typically used to gauge interest among shareholders for a corporate action such as a fund-raising or merger. If a party agrees to be wall-crossed, it is then unable to trade or disclose the information further.

- By Marietta Cauchi, Dow Jones Newswires; +44 207 842 9241; marietta.cauchi@dowjones.com

Grafico Azioni Punch Taverns (LSE:PUB)
Storico
Da Giu 2024 a Lug 2024

Grafico Azioni Punch Taverns (LSE:PUB)
Storico
Da Lug 2023 a Lug 2024