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Financial Services Authority imposes record $9.6m fine

image captionThe FSA said Mr Goenka placed big orders at the very end of trading on the London Stock Exchange

The UK's Financial Services Authority (FSA) has imposed its highest fine to date on an individual.

Rameshkumar Goenka, a Dubai-based private investor, must pay $9.6m (£6m) for manipulating the value of shares in Indian industrial group Reliance.

Of the fine, $3.1m will reimburse an unnamed bank for the loss it suffered at Mr Goenka's hands.

It had sold Mr Goenka a structured product, the value of which depended on Reliance's closing share price.

In order to avoid a loss on the product, the FSA said the investor had "arranged for a pre-planned series of substantial and carefully timed orders to be placed in the final seconds of the [London Stock Exchange]'s closing auction".

Mr Goenka's fine would have been more than $12m, but was reduced by 30% after the investor agreed to settle the claim at an early stage.

"[Mr] Goenka's structured product was an investment that would have made him a considerable profit had it been successful for him," said Tracey McDermott, the FSA's acting director of enforcement.

"When he saw that it was not going to produce the desired result, [Mr] Goenka manipulated the market to avoid a substantial loss."

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