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FSA fines individual £15,000 for

market abuse

FSA/PN/063/2004
7 July 2004

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The FSA has today fined Peter Bracken £15,000 for committing market abuse. Mr Bracken, the former Group Head of Communications at Whitehead Mann Group plc ('WMG'), was found to have, on separate occasions in September and November 2002, misused unpublished, confidential information about the company's financial performance to trade in WMG shares for personal profit.

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Andrew Procter, Director of Enforcement at the FSA, said:

“The FSA will not tolerate individuals abusing positions of trust for personal gain. We view the misuse of unpublished confidential information in this case as being particularly serious given the privileged position Mr Bracken occupied.

“The Market Abuse Code is fundamental to protecting investors and maintaining confidence in the UK's financial system. Market users should be in no doubt that the FSA will pursue anyone who misuses confidential information to make money.”

Mr Bracken, in his role as Group Head of Communications, learned on 26 September 2002 that WMG was likely to issue a negative trading statement in the near future. Within an hour of receiving this information Mr Bracken had approached his broker placing an order to short sell 5,000 shares in WMG at 190p to settle by 10 October. WMG subsequently made an announcement at 8.15am on 27 September 2002 stating that the Company's expected profit would be at similar levels to 2001 due to difficult trading conditions. Mr Bracken, at 9.47am on the same day, then instructed his broker to buy 5,000 WMG shares at 138p to close out his short position, on which he made a profit of £2,430.

In early November 2002 Mr Bracken received the detailed figures for the Company's interim results and also learned that the CEO of WMG was to step down and a new CEO appointed shortly. On 11 November Mr Bracken again approached his broker and instructed them to short sell 3,000 WMG shares at 123p to settle by 25 November. WMG, at 7.02am on 12 November, announced its interim results for the half-year ending 30 September 2002 and also the appointment of a new CEO. The shares subsequently fell from 130p to 117.5p by the close of trading on 12 November and had fallen to a low of 105p by 21 November. Mr Bracken, at 1.51pm on 21 November, instructed his broker to close out the position with the purchase of 3,000 WMG shares at 107p, which produced a profit of £393.

In carrying out both these transactions Mr Bracken, a regular investor, was in breach of WMG's own internal rules requiring employees to seek permission before dealing in the company's shares.