One of the most senior bankers at investment firm JP Morgan Cazenove resigned abruptly today after the City watchdog said it would fine him £450,000 for market abuse.
Ian Hannam, global chairman of equity capital markets, will appeal against the regulator's decision to penalise him for allegedly providing insider information on JP Morgan client Heritage Oil to another customer.
Mr Hannam wrote two e-mails to an unidentified businessman disclosing a potential bid for Heritage, for whom he was acting as a key adviser, at a time when he was aware the recipient might also make a move for a stake in the company.
Alluding to Heritage's chief executive Tony Buckingham, he said: "PS - Tony has just found oil and its looking good".
In an earlier e-mail, Mr Hannam reveals his share price expectations for the bid offer, adding: "I am not trying to force your hand, just wanted to make you aware of what is happening".
Mr Hannam, who has advised companies, governments and individuals in more than 300 deals in more than 40 countries during his 20 years with the firm, said appealing over the case while remaining at work would be an "unfair distraction" to clients and colleagues.
The former soldier did not set out to commit market abuse, the Financial Services Authority (FSA) said, but his "failings were serious in view of his experience and senior position".
Mr Hannam, whose current deals include advising miner Xstrata on its merger with Glencore, started his banking career at Salomon Brothers in New York in the early 1980s before moving to Robert Fleming in 1992.
His team at JP Morgan was responsible for bringing a number of resource firms based in emerging markets such as India, Kazakhstan and Mexico to London's FTSE 100 Index.
Mr Hannam has referred the FSA's decision to a tribunal where both parties will present their case - the hearing will determine the appropriate action and could see the FSA's decision upheld, varied or cancelled.
In a statement released today, Mr Hannam said he will complete current client commitments and ensure a "smooth handover" of responsibilities.
He said: "I have fully co-operated with the FSA from the start. It is important to note that the FSA has not challenged my fit and proper status and has accepted that I acted with honesty and integrity.
"It has also accepted that I was acting in the best interests of my client and no one benefited or was damaged."
The FSA said the size of the fine "reflects the serious nature of the market abuse".
The unidentified businessmen are both said to have interests in the Kurdistan region of Iraq.
The FSA said it was clear the oil discovery to which Mr Hannam referred in the second email related to a find in Uganda.
Tracey McDermott, acting FSA director of enforcement and financial crime, said: "Inside information is extremely valuable and must be handled with care to ensure that it is properly controlled and that appropriate safeguards are observed."
The emails were sent by Mr Hannam in September and October 2008.
Jersey-based Heritage Oil is listed on the London Stock Exchange and has core operations in Africa, the Middle East and Russia. During the highlighted period, Heritage had projects in Uganda and the Kurdistan region of Iraq.
In a separate notice released today, Heritage revealed it had made a new gas find at the Miran West-3 well in the Kurdistan region of Iraq.