JPMorgan star Hannam resigns over insider storm

 

Ian Hannam, one of the City's biggest deal makers, has quit as chairman of capital markets at JPMorgan Cazenove after being fined £450,000 by the Financial Services Authority (FSA).

Mr Hannam, who is advising Xstrata on its $90bn (£56bn) merger with Glencore, will leave once that deal is completed in the summer. He is appealing against the FSA fine.

The FSA said Mr Hannam had sent out emails to two potential clients in Kurdistan talking about a possible bid for his client Heritage Oil and later a new oil find by the company. This was inside information which he should not have disclosed, the watchdog said.

The regulator said while Mr Hannam had not set out to commit market abuse, it had to take his failing seriously because he was such a senior and experienced banker. It added: "He was a role model for the people that worked for him and for others at JPMorgan."

Tracey McDermott, acting FSA director of enforcement and financial crime, said: "Inside information is extremely valuable and must be handled with care to ensure it is properly controlled and appropriate safeguards are observed. This applies to all market participants but is particularly important for senior practitioners who regularly interact with a wide circle of contacts."

Mr Hannam had been a key adviser to Heritage Oil and its chief executive Tony Buckingham since 2007. The explorer had interests in Kurdistan.

Two years ago the FSA fined three Turkish oil executives £1.2m for insider dealing in Heritage shares. Since then it has trawled through 20,000 emails relating to the explorer and its advisers.

In September 2008, Mr Hannam sent an email to a Kurdistan business representative, Mr A, who is understood to represent the Kurdistan government and blind-copied it to another Kurd businessman, Mr B, which read: "I thought I would update you on discussions that have been going on with a potential acquirer of Tony Buckingham's business. Tony, advised by myself, has deferred engaging with the client until Thursday of next week although we know they are very excited about the recent drilling results of Heritage Oil... I believe the offer will come in in the current difficult market conditions at £3.50-£4 per share. I am not trying to force your hand, just wanted to make you aware of what is happening."

The FSA said the email was sent at a time when Mr Hannam knew the organisation Mr A represented might be considering buying a stake in Heritage.

In October 2008 an email was sent to members of his team and to Mr A and Mr B. It had the footnote to them: "PS – Tony has just found oil and it is looking good."

The watchdog said: "It would have been clear from publicly available information that this discovery related to Heritage's Warthog-1 well in Uganda."

Mr Hannam said: "I am appealing the decision notice issued by the FSA... and have consequently decided to resign from JPMorgan.

"Appealing the case while still at the firm would be an unfair distraction to my clients and colleagues."

David Davis, the former Conservative minister and a long-standing friend of Mr Hannam, said he was appalled by the FSA's decision. He wrote a reference for Mr Hamman when he went to the first appeal stage of the FSA's decision to fine him which he lost.

"I have never seen such a thin case," declared Mr Davis. "The FSA is extending the definition of insider trading well beyond what it was intended to cover. In this case there were no beneficiaries and no one lost any money. It is an astonishing decision by a body which has had a history of dysfunctionality."

Mr Hannam 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.

"I strongly believe, and have been advised by my legal counsel, that the FSA's conclusions are wrong and I look forward to challenging them in an independent tribunal."

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine