British analyst fined £50,000 for misleading message

British analyst fined £50,000 for misleading message

January 13, 2011
LONDON, Jan 13 — A former investment analyst has been fined £50,000 (RM250,000) for sending misleading information via instant messages, pushing shares in a property company up sharply, Britain’s market regulator said today.

Christopher Gower, at the time a senior research analyst at MF Global Securities, sent messages to 14 clients, a Bloomberg reporter and MF Global salesmen implying he had obtained insider information about the REIT status of Enterprise Inns.

What Gower learned during a meeting with the head of Punch Taverns was, in fact, already in the public domain and portraying it as insider information misled the market, the Financial Services Authority said.

Starting his instant message “Hot off the press”, Gower said he had just had a meeting with the chief executive of Punch Taverns. “They have heard from HM Revenue & Customs that it is highly likely Enterprise Inns has been granted REIT status and ETI are due to announce this on May 13 at interims,” he went on to say in the message on May 7, 2008.

“Expect ETI to bounce, was up 10 per cent on previous HMRC news, but then fall back as (the market) realises it will take time to implement.... more on my meeting to follow,” he said.

Enterprise Inns shares rose 4.45 per cent after Gower’s messages were sent, amid high volume.

While the FSA accepted 34-year-old Gower did not intend to give the impression he had inside information, it said he had not observed proper standards of conduct.

“There is no excuse for a senior retail analyst to be so careless with messages that could have such an impact on the market,” Margaret Cole, the FSA’s managing director of enforcement and financial crime said.

“Gower’s dissemination of inaccurate information contributed to a large increase in the volume of shares traded and a disorderly market in ETI shares.”

MF Global was not available to comment. — Reuters