Simon English: Despite this result, the FSA is unlikely to catch any clever wheeler-dealers

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The Independent Online

Outlook: Goal. A nice win for the Financial Services Authority (FSA) yesterday, which nabbed US hedge fund king David Einhorn for a spot of market abuse in the trading of shares in Punch Taverns. Having overheard that the struggling pub group was close to a new fundraising exercise – that's inside information – he moved to dump his stock.

The FSA did what it is supposed to do, check unusual trades, and must have found it fairly easy to put the pieces together. Einhorn and his fund are fined a whopping £7.2 m.

The surprising thing here is just how blatant, how obvious Einhorn was. Which leads to the following point regularly made by stock professionals: only the lazy or stupid ever get caught for insider trading.

Einhorn is a big fish of the sort the FSA has been trying to land for years, so credit where it is due. But it seems unlikely that the fine will make other wheeler-dealers fearful.

If Einhorn had been cuter, found some other way to go short of Punch shares rather than simply selling the ones he had, then in all likelihood he would be scot free.

s.english@independent.co.uk

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