UK’s Financial Services and Markets Tribunal, an executive agency of the Ministry of Justice, found that research analyst Robin Chhabra and his friend Sameer Patelto committed market abuse by using inside information to carry out a series of profitable spread bets. During the summer of 2004, Chhabra was a research analyst at Evolution Securities Limited covering Ebookers plc and Eidos plc. His friend Patel was an experienced spread better who regularly placed bets on football matches and FTSE indices.
On three separate occasions Chhabra became aware of important and confidential information about forthcoming announcements relating to Ebookers plc and Eidos. Often within minutes of getting the information, Chhabra would call Patel on his mobile phone. Shortly after the calls, Patel placed spread bets on the Ebookers plc or Eidos stocks. The total benefit to Patel from these bets was £85,541.
The FSA found that Chhabra and Patel had committed market abuse and proposed to ban and fine them both. Chhabra and Patel then referred the FSA’s findings to the Tribunal. The Tribunal’s decision confirms the FSA’s findings of market abuse. A separate hearing will be held to determine the appropriate action against Chhabra and Patel.