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
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
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

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee