LONDON (Reuters) - A former fund manager at Newton Investment Management has been fined more than 30,000 pounds ($40,000) for attempting to influence competitors during share sales, demonstrating a lack of due skill and care, the British regulator said on Tuesday.
The Financial Conduct Authority (FCA) said that Paul Stephany, who managed about 1.8 billion pounds invested mainly in UK equities at Newton, tried to use the collective power of investors to undermine proper market pricing processes and risked causing harm to other market players.
Stephany, who had worked in financial services for a decade, told 14 rival fund managers of his valuation limits during an IPO of On The Beach Plc and used similar tactics during a share placing by Market Tech Holdings in 2015, the FCA said.
“These markets play a vital role in helping companies raise capital in the UK’s financial markets and when they are put at risk the FCA will take action,” said Mark Steward, the FCA’s head of enforcement and market oversight.
Stephany, a business consultant since leaving Newton in 2017, was fined 32,300 pounds - about 10 percent of his salary at the time. He said he was pleased the FCA recognised he had acted unintentionally and that he had been open and transparent.
“I fully respect the regulator’s decision, which acknowledges that my honesty and integrity as a fund manager are not in doubt and that no market user lost out financially due to my actions,” he said.
“This is why the penalty has been set at the lowest level available and I am able to continue working in the financial sector.”
The FCA said the investigation was not related to a separate inquiry announced in 2017 into whether four asset management companies - including Newton - might have broken competition law during share sales.
A spokeswoman at Newton said it was not company policy to comment on matters relating to former or current employees, but that the firm had been cooperating fully with the FCA. She declined to comment further.
($1 = 0.7683 pounds)
Reporting by Kirstin Ridley; Editing by David Goodman