Genel Enerji boss hit by FSA's biggest fine ever

The City watchdog today announced the biggest fine in its history against an individual for insider trading.

The Financial Services Authority (FSA) said it had fined Mehmet Sepil, the chief executive of Turkish oil exploration company Genel Enerji, £967,005 for dealing shares of UK-listed firm Heritage Oil using inside information.

Two of his colleagues - Murat Ozgul, chief commercial officer, and Levent Akca, exploration manager - were also hit with penalties of £105,240 and £94,062 respectively.

Mr Sepil's fine marks a record for the FSA, surpassing even the £750,000 handed out to Philippe Jabre for market abuse in August 2006.

The FSA said Mr Sepil and his colleagues made profits of more than £312,000 trading shares by using inside information on an oil find in the Miran oil field in Kurdistan, which was a joint venture between Heritage and Genel Enerji.

The three were closely involved with the project and bought Heritage stock following positive results of a drilling test before the discovery was made public, according to the FSA.

When the news was released to the stock market as a "major oil discovery", Heritage's shares shot up by 25% and Mr Sepil and his colleagues sold stock at a significant profit each, the FSA added.

But the FSA said they voluntarily contacted the FSA three months after the trades to make "certain admissions" and offered to hand over their profits.

The regulator reduced their fines by 30% after the trio settled at an early stage, with the penalties also including the profits made on the shares.

The FSA said while they had not set out to commit market abuse, the fines "send a clear message" that insider trading is not acceptable.

Margaret Cole, director of enforcement at the FSA, added: "The FSA expects those entrusted with inside information not to betray that trust.

"We will not tolerate the abuse of a privileged position to make a personal profit at the expense of other market participants and these penalties underline our commitment to combating this behaviour."