First fine over stock market abuse

Published on Thursday 7 April 2005 02:17

THE Financial Services and Markets Tribunal yesterday directed Britain’s financial regulator, the Financial Services Authority, to fine a former accountant for stock market abuse.

As such, the FSA has fined Arif Mohammed, a former Pricewaterhouse Coopers (PwC) audit manager, 10,000.

The case was the first time the market abuse provisions in the Financial Services and Markets Act 2000 had been the subject of a tribunal decision following Mohammed’s appeal against the FSA decision.

The FSA said: "Mohammed bought shares in Delta, a London Stock Exchange-listed electrical and engineering services company, based on his knowledge that the company intended to sell its electrical division.

"Mohammed became aware of this confidential information because Delta’s electrical division was an audit client of PwC and Mohammed worked on the company’s audit."

David Mayhew, acting enforcement director at the FSA, said: "Mr Mohammed, as an auditor, knew he should not be dealing in Delta shares ... to abuse his position by essentially cheating for personal gain is a breach of trust and undermines the integrity of the market."

The offence happened in late 2002, with Mohammed making a profit of 3,750 on the share sale once Delta’s stock went up on the announcement of the electrical division’s sale on 9 December, 2002.