Financial regulators originally questioned the former JP Morgan rainmaker Ian Hannam under caution because they believed he may have committed a criminal offence, it emerged yesterday.
The Financial Conduct Authority (FCA) said its predecessor, the Financial Services Authority (FSA), had investigated "the possibility that Mr Hannam was guilty of a criminal offence".
No criminal charges were ever brought against Mr Hannam who, the regulator claimed yesterday, is now attempting to use "ingenious legal arguments" to overturn a £450,000 market-abuse fine levied by the FCA.
In its closing written submission in a High Court case, the FCA argued that each of Hannam's arguments "fails on its terms".
The former JP Morgan Cazenove banker and ex-SAS reservist is appealing against FCA findings that he disclosed inside information about a possible takeover of a client, Heritage Oil, and an oil discovery, in emails from 2008. Mr Hannam argued that he might have made up details in the takeover email, meaning he would not have passed on inside information.
The FCA claimed this was "a remarkable position to adopt". Its closing statement added: "The impression Mr Hannam gives is of a man with considerable personal charisma, but... is rather loose in what he says."
Mr Hannam, who was disciplined by JP Morgan in 2009 around the time the FSA began its investigation, denies the statements in the emails constituted inside information and argues that the disclosures were made in the course of his work and for the benefit of the client.
In a rival submission, lawyers acting on behalf of the 57-year-old said: "Mr Hannam honestly believed, and had every reason to believe, that these emails did not amount to market abuse in circumstances where they were sent in confidence to an individual trusted by and known to his client, who understood his responsibilities in relation to potentially sensitive information.
"For these reasons, Mr Hannam respectfully invites the tribunal to direct the authority to discontinue its action against him, alternatively, to direct that no penalty be imposed."
Hannam quit his job as chairman of capital markets at JP Morgan to clear his name and is seeking to restore his reputation with an appeal, which began in July, against the fine
The case is being closed watched across the Square Mile because it is a high-profile test for the FCA's tactic of targeting big names to fight market abuse, following the strategy of US regulators.
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