A City Tribunal has decreed that Ian Hannam, one of the leading investment bankers of his generation, did commit market abuse in two instances, upholding the ruling by the City watchdog, the Financial Conduct Authority.
The former chairman of capital markets at JPMorgan had been fighting to clear his name after the regulator fined him £450,000 for disclosing to a client inside information about a potential takeover of an oil and gas company called Heritage. At the time, JPMorgan was acting on behalf of Heritage.
At issue were two emails, one of which disclosed that Heritage was at the receiving end of a takeover bid, and another saying that it had “just found oil”.
Mr Hannam appealed the ruling but, after considering the case since hearings in July and October of last year, the Upper Tribunal upheld the decision.
The dealmaker described himself as “loyal and British” before declining to comment further when reached by telephone after the ruling, referring enquiries to a statement in which he said he was “obviously disappointed” at the decision and would give “careful thought” to whether he would launch an appeal against it.
The Tribunal also upheld the £450,000 penalty and said: “We consider that it could never be in the proper course of a person’s employment for him to disclose inside information to a third party, where he knows that his employer and client would not consent to the public disclosure of that information, unless he knows that the recipient is under a duty of confidentiality and that he knows that the recipient understands that to be the case.”
Mr Hannam said he had taken the case to the Tribunal because he felt the rules around market abuse were unclear. The fact that the judgement this afternoon was lengthy and detailed showed his view was reasonable, he said.
Mr Hannam has advised on some of the biggest takeover deals of the past two decades, particularly in the mining and natural resources industries, and has continued working since the fine, advising on Glencore’s takeover of Xstrata among other deals.
In the hearing last year, the FCA had argued it was “very important to deter that sort of careless attitude to inside information” and warned of a “floodgate” of appeals opening if the Tribunal overruled.
Mr Hannan’s QC had responded that the emails in question did not contain inside information.
The banker had passed on the messages to Ashti Hawrami, the Kurdish natural resources minister, about Heritage Oil’s situation.
He has received widespread support from City friends and contacts, including former Xstrata boss Mick Davis, Aberdeen Asset Management chief Martin Gilbert and former Conservative leadership candidate David Davis. Mr Hannam gave thanks to his supporters in his statement today.