Insider trader loses 'poverty' appeal against £66,000 fine

A share trader who lost thousands of pounds gambling on stocks and derivatives yesterday had his plea for a reduced Financial Services Authority fine for "financial hardship" thrown out.

The FSA said Andre Scerri had pleaded financial hardship after being fined £66,062.50 for market abuse. Scerri had traded on inside knowledge after becoming aware that Amerisure Resources, an oil and gas exploration company, was about to raise cash by issuing new shares at a discounted price.

As a result, he sold his shares the day before the placing, buying them back the next day at the discounted price. The watchdog initially ordered him to pay back £46,062.50 in profits made as a result of the "market abuse" plus a £20,000 fine.

But it waived the fine after he submitted information showing it would cause financial hardship. When he appealed the conviction to the independent Financial Services Tribunal, it emerged that the information was misleading and incomplete. The Tribunal re-imposed the fine despite Mr Scerri subsequently losing what the FSA said was "a substantial sum" by financial gambling.

Margaret Cole, head of enforcement and financial crime at the watchdog, said: "The Tribunal's decision to impose a financial penalty on Scerri in addition to the disgorgement, serves as a reminder to all that financial hardship claims will not succeed where assets have been frittered away. Scerri's financial position was entirely of his own making and we welcome the Tribunal's decision to reinstate the fine."

* Malcolm Calvert, the former Cazenove stockbroker who was recently released from jail after serving part of his sentence for insider dealing, yesterday dropped his plans to appeal against his sentence. The decision means he will be liable to pay £50,000 in costs and a £473,955 penalty.