Market abuse – consultant fined for insider dealing

The FCA has fined Russel Gerrity, an oil rig consultant, £309,843 for insider dealing in breach of Article 14 of the UK Market Abuse Regulation (UK MAR).

Article 14 of UK MAR provides that a person shall not engage or attempt to engage in insider dealing – that is deal while in possession of, and using, inside information (Article 8 of UK MAR).

As a consultant to oil and gas companies, Mr Gerrity had access to information about whether oil and gas had been discovered during the drilling of wells and on a number of occasions he:

• took advantage of the information to buy shares in two companies ahead of announcements that significantly increased their share price; and
• avoided a loss by selling shares ahead of an announcement that no oil or gas had been found, which led to a significant drop in share price. 

The FCA was satisfied that the information which Mr Gerrity had was inside information which he had access to through the exercise of an employment, profession or duties (Article 8 of UK MAR), and that he would have been aware of the laws and regulations around insider dealing as he was responsible for training new consultants and ensuring they understood the policies including one on insider trading.

The FCA said that in reaching its decision it relied on Recital 24 of UK MAR, which provides that a person who deals while in possession of inside information will be presumed to have used that information.

The fine would have been £387,448 but Mr Gerrity qualified for a 30% settlement discount.

The companies concerned have not been criticised by the FCA.