Financial News

  • 28 May 2014, 13:05

Star Banker Braced For FCA Appeal Verdict

A former star investment banker is braced for a legal ruling that has been labelled a key test of the City regulator's competence at pursuing cases of alleged market abuse.

Sky News has learnt that the Upper Tribunal of the High Court is likely to disclose within days the outcome of an appeal by Ian Hannam, a former JP Morgan dealmaker, following a 450,000 fine imposed on him in 2012.

A source said the ruling could be handed down as soon as this week, ending nine months of uncertainty for both Mr Hannam and the Financial Conduct Authority (FCA).

The Financial Services Authority (FSA) - as the watchdog was then called - hit Mr Hannam with the penalty after it accused him of inappropriately disclosing inside information in 2008 about Heritage Oil, a London-listed company, to a prospective buyer of the business.

Mr Hannam, who left JP Morgan voluntarily in the wake of the fine, disputed the regulator's conclusions, arguing that he acted in accordance with City rules, and vowed to fight the decision.

If Mr Hannam's appeal fails, it would be greeted with relief by senior executives at the FCA following a torrid period in which its own disclosure of market-sensitive information has come under intense scrutiny.

Last month, George Osborne, the Chancellor, ordered an inquiry into the FCA's handling of an announcement of a probe it was launching into certain areas of the life insurance industry.

Mr Hannam was not accused of seeking any personal financial gain by the watchdog.

The FCA and a spokesman for Mr Hannam both refused to comment on either the timing of the Upper Tribunal's ruling or its outcome.

In a statement last July, when his appeal got underway, Mr Hannam said:

"I do not believe that I broke the rules on inside information. On the contrary, I was acting in the proper course of my employment as a corporate financier, pursuing a transaction on behalf of my client, Heritage Oil & Gas. But that is ultimately for the Tribunal to decide.

"The case raises questions about the definition, and treatment of, inside information on the corporate finance side of the 'Chinese Wall' and clarification by the Upper Tribunal is important for London as a global financial centre."

A former SAS soldier, Mr Hannam was nicknamed "the king of mining M&A" after he orchestrated a string of deals that led to some of the world's biggest natural resources companies, including Xstrata and Bumi, being listed on the London Stock Exchange.

Since leaving JP Morgan, he has rebuilt his career, taking control of a number of businesses in the mining and resources industries, and offering financial backing to Heathrow Hub, one of the shortlisted candidates for expanding runway capacity in south-east England.

The FCA's predecessor faced vehement criticism in the aftermath of the banking crisis for failing to match its US counterparts in bringing financial wrongdoers to justice.

Figures published last month showed that fines totaling 35.5m were imposed on individuals in 2012 and 2013, a 76% increase on the previous two years.