Financial watchdog hands out more fines in 2006
The financial watchdog has handed out a record 25 fines this year, the highest number since it was set up five years ago, with cases including a landmark market abuse penalty for hedge fund manager Philippe Jabre.
But the Financial Services Authority's (FSA) average fine at just over 520,000 pounds was lower than last year, when U.S. banking giant Citigroup was hit with the watchdog's second highest ever penalty over a controversial multi billion euro government bond trade.
Including two fines levied this month, the FSA handed out 25 fines in 2006, totalling just over 13 million pounds an average of 520,126 pounds per fine.
That compares to an average of 845,250 pounds last year from 20 cases, lifted by Citigroup's 13.9 million pound penalty.
This year's high profile fines included the FSA's record 750,000 pound penalty against star trader Jabre for market abuse and for breaching the FSA's principles the watchdog's first against a hedge fund manager.
The fine, as the FSA steps up its scrutiny of the hedge fund industry, is the FSA's largest imposed on an individual, and more than double the previous largest fine.
The FSA said Jabre, a former managing director at GLG Partners, had used confidential information about a convertible bond sale in 2003 for Japan's Sumitomo Mitsui Financial Group <8316.T>. Jabre argued the FSA had no jurisdiction in Japan, but his appeal against the fine was eventually dropped.
The FSA said GLG Partners was also responsible and fined it another 750,000 pounds.
The highest fine this year was for 6.4 million pounds levied against Deutsche Bank for market misconduct in two transactions, followed by 1.2 million pounds against a subsidiary of Warren Buffett's Berkshire Hathaway over reinsurance deals that the watchdog said were not in fact used to transfer significant risk.
The FSA, keen to maximise publicity of its large penalties, has cut back on fines for minor rule breaking, with several small firms being rapped on the knuckles with "public censure" a process of naming and shaming rather than fines.
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