FSA fines traders £195k following US hedge fund failures

The Financial Services Authority (FSA) has handed out a further £195,000 in fines in the wake of the failures at hedge fund Greenlight Capital.

The FSA has fined Alexander Ten-Holter, Greenlight trader and former compliance officer, £130,000 for failing to question and make reasonable enquiries before selling the fund's stake in Punch Taverns. The sale was made before Punch announced a £375 million fundraising exercise that led to its shares falling by 29.9%. The FSA said Ten-Holter had not taken steps to satisfy himself the order to sell was not based on inside information. He has also been banned from performing compliance oversight and money laundering functions.

Greenlight said in a statement: 'Alex is a valued member of the Greenlight team and our trader in the UK. We believe that the FSA's action against him is unwarranted. He has our full support.'

Casper Agnew, trading desk director at JP Morgan Cazenove, has been fined £65,000 for failing to identify and act on a suspicious order from Greenlight to sell Punch shares that allowed the firm to be used to facilitate insider dealing or market abuse. The FSA said Agnew had failed to act with due skill, care and diligence, especially because he became aware that major Punch shareholders were likely to have obtained inside information through pre-marketing.

The fines follow the £7.2 million levied on Greenlight earlier in the week by the regulator for engaging in market abuse in relation to an anticipated significant equity fundraising by Punch Taverns in June 2009.

Tracey McDermott (pictured), FSA acting director of enforcement and financial crime, said Ten-Holter's approach to compliance oversight was 'wholly inadequate', while Agnew's experience as a trade meant he should have been suspicious of the transaction and ware of his responsibilities to report it.

'Compliance professionals and staff on sales and trading desks play a key role in assisting the FSA in detecting and preventing market abuse,' she said. 'Approved persons should be in no doubt as to their responsibilities in this area and the FSA will not hesitate to take tough action where they fall down on these.'