The broker at the centre of the Greenlight Capital insider trading scandal will not fight his £350,000 fine despite clients and rivals agreeing that he did little wrong.
This means that the Financial Services Authority (FSA) will have claimed its second high-profile scalp from an incident involving Punch Taverns in 2009, having fined the hedge fund Greenlight and its owner, David Einhorn, right, £7.2m last month.
Andrew Osborne, who has resigned from Bank of America Merrill Lynch, has been told by clients that he should not put his young family through what could be a costly two-year legal battle with the FSA. One of the City's most highly rated brokers, clients say that they will stand by Mr Osborne and some might offer him in-house roles. The FTSE 100 group Tullow Oil even replaced Merrill Lynch as one of its brokers, valuing the "very valuable" relationship with Mr Osborne over the one with the bank.
The FSA has taken an unusually tough stance on Mr Osborne to make him an example to other brokers. He was Punch's broker in 2009 when the pub group was about to launch a £350m rights issue. Mr Osborne warned Mr Einhorn, an investor in Punch, that the fundraising was coming to ensure his support. Ordinarily, a shareholder would be expected to agree to not buy or sell shares in exchange for the forewarning, but Mr Einhorn refused. Greenlight then sold some of its stake ahead of the fundraising.
Many believe that Mr Osborne was just unlucky in what is considered standard broking practice. Mr Einhorn has insisted he did nothing wrong.
Mr Osborne could not be reached for comment.Reuse content