Corporate fraud fine of £2.8m for share scam

Published on 21 May 2010 under category: legal

A former city broker has been fined £2.8 million by the finance industry watchdog for ramping up share prices.

The investigation by the Financial Services Authority found that Simon Eagle raised the price of listed stock that he had bought, by selling them to clients of an agency-only stockbroker that he purchased shortly after the shares.

Trading was suspended shortly after prices were artificially ramped up from 2.5 pence in May 2003 to 11.75 pence in July 2004.

Clients were left owing around £9 million in unsettled trades.

Margaret Cole, the director of enforcement, said: "This scheme was rotten throughout and at the core was Simon Eagle. He showed a breathtaking disregard for his clients, for his duty as an approved person and chief executive and for the effect of his scheme on markets. "

Winterflood Securities, the firm used by Eagle to put through his shares, earlier lost an appeal against a £4 million fine for its involvement.

This is the latest in a series of high-profile penalties meted out by the watchdog for suspicious activity and insider trading.

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