Hedge fund fined for insider dealing
Jan
26
Written by:
26/01/2012 16:24
David Einhorn and his fund Greenlight Capital have been fined £7.2m.
The UK financial markets watchdog the FSA handed out the fine for trading on inside information about Punch Taverns.
In 2009 Einhorn sold shares in Punch after being given a tipped off that the pub owner was about to sell new shares which would devalue the shares currently owned by the hedge fund. According to the BBC by doing this the fund avoided losses of £5.8m
Einhorn's claimed he did not believe the tip-off counted as inside information, but this excuse was dismissed by the FSA
"Einhorn is an experienced professional with a high profile in the industry," said Tracey McDermott , the FSA's acting director of enforcement and financial crimes, told the BBC.
"We expect someone in his position to be able to identify inside information when he receives it and to act appropriately."
Mr Einhorn will have to pay £3.6m, and his hedge fund the remainder.
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