The Financial Services Authority (FSA) has confirmed bans on a hedge fund manager and two traders for engaging in market abuse.
The three men received final notices from the FSA in December 2010 on the grounds they were not fit and proper persons. The three men appealed and the case was referred to the Upper Tribunal.
On 28 September 2012 the Upper Tribunal directed the FSA to ban Swiss-based fund manager Stefan Chaligné and traders Patrick Sejean and Cheickh Diallo from performing any major role in regulated financial services.
Chaligné ran the €95 million Iviron hedge fund.
The FSA alleged that he placed improper trades that pushed up the share prices of several of his holdings and boosted his fund’s reported value and his performance fees.
In September the Financial Times reported that according to evidence given at the Tribunal Chaligné made large purchases of five European and two US equities in the final minutes of trading on December 31, 2007, boosting his fund’s reported value by €2.7 million and his performance fees for that year by €360,000.
Chaligné was fined of £900,000 plus disgorgement of the financial gain he obtained, which was €362,950 (£305,934).
Sejean, a former senior salesman of Cantor Fitzgerald Europe’s London-based French desk was fined £650,000.
Sejean’s penalty was deferred pending the Tribunal decision after he appealed that his fine should be reduced on the grounds that it would cause him financial hardship.
The tribunal was not satisfied that Sejean provided a wholly truthful account of his assets and liabilities, so it was not satisfied that he had established hardship.
The FSA. Said even if he had been able to show hardship, it would have been tempered by his ‘profligate spending’, which showed his unwillingness to take responsibility for his actions.
Tracey McDermott, FSA director of enforcement and financial crime, said: ‘We particularly welcome the tribunal’s finding that, given the seriousness of Sejean's conduct, the severity of the punishment would have been reduced only in the face of clear evidence of excessive hardship.
‘Sejean was unwilling or unable to provide this and the judgment highlights the importance of cooperating with the FSA at all stages of the regulatory process.’