FSA fines former Pacific Continental Securities stockbroker for using inside information

On 17 November 2009, the FSA published the Final Notice it has issued to Alexei Krilov-Harrison, a former stockbroker at Pacific Continental Securities UK Ltd (PCS). The FSA has fined Mr Krilov-Harrison £24,000 for breaching sections 118(3) and 123(1)(b) of the Financial Services and Markets Act 2000 for using inside information to encourage clients to buy shares.

Read more – http://www.fsa.gov.uk/pubs/final/krilovharrison.pdf

The FSA found that Mr Krilov-Harrison used price sensitive information as part of his sales tactic to encourage his clients to buy shares in an AIM-traded company. The company was about to announce a major contract which would result in an increase in the company’s share price. This information was not in the public domain, and as an experienced member of the sales staff and approved person, Mr Krilov-Harrison would have been aware that this inside information should not have been disclosed to his clients. The FSA found that Mr Krilov-Harrison’s actions were deliberate and motivated by his desire to get a bonus.

Commenting on this case, Margaret Cole, FSA Director of Enforcement and Financial Crime, said, “Anyone who uses inside information to encourage their clients to buy shares is abusing their privileged position and cheating other honest investors. This is plainly wrong. Market participants must ensure they do not pass inside information to their clients in these circumstances”.

Read more – http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/159.shtml

In determining the level of fine, the FSA took into account Mr Krilov-Harrison’s own financial circumstances, as well as the poor regulatory and compliance culture at PCS, and the fact that he settled at an early stage of the investigation.

read more – http://www.ifaonline.co.uk/ifaonline/news/1562336/fsa-fines-stockbroker-gbp24-insider-dealing