The Financial Conduct Authority (FCA) has fined former Newton Investment Management fund manager Paul Stephany £32,000 for his conduct in relation to an initial public offering (IPO) and a placing.
The regulator revealed that, on two separate occasions, Stephany submitted orders as part of a book build for shares that were to be quoted on public exchanges. Prior to the order books for the new shares closing, Stephany contacted other fund managers at competitor firms, in an attempt to convince them to cap their orders at the same price limit as his own orders.
The FCA said that the former fund manager risked undermining the integrity of the market and the book build by trying to utilise their collective power and, as a consequence, he failed to observe proper standards of market conduct.
Furthermore, Stephany was found to have acted without due skill, care and diligence by failing to give proper consideration to the risks of engaging in these communications.
Commenting, FCA executive director of enforcement and market oversight Mark Steward said: “This matter underscores the importance of fund managers taking care to avoid undermining the proper price formation process in both IPOs and placings.
“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.”
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