Potts quits Evolution after £75,000 fine from regulator

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The Independent Online

Evolution Securities, the stockbroker, yesterday parted company with its head of market making, Chris Potts, just over a week after the City trader was fined £75,000 by the Financial Services Authority for market abuse.

Evolution Securities, the stockbroker, yesterday parted company with its head of market making, Chris Potts, just over a week after the City trader was fined £75,000 by the Financial Services Authority for market abuse.

Although Mr Potts had been suspended following the regulator's disciplinary action, Evolution insisted that his departure had been on amicable terms, and said that it wished him well in his future business endeavours.

The news came at a difficult time for Evolution, whose shares dropped 1p to 145.5p yesterday. Along with Mr Potts, it was also fined by the FSA for market abuse on 12 November. The brokerage will have to pay out £500,000 for its involvement in the sale of shares in the shell company, Room Service, in September and October last year.

There have also been suggestions that City money managers may in the future shy away from fund raisings conducted by the broker. This comes in the wake of profits warnings by Medical Solutions and Planet Health Care, months after Evolution helped the two small-cap companies raise cash in the Square Mile.

Evolution, whose chairman is Richard Griffiths, strongly denied this and also rejected speculation that the departure of Mr Potts would herald a retreat by the broker from some of its market-making activities.

Meanwhile, market professionals reported that a growing number of investors had been betting against the brokerage in recent months by taking out short positions in its stock. Shorting a stock allows an investor to make money from a sharp drop in the share price of a company. It is estimated that the short position in Evolution is as high as 13 per cent of the stockbroker's share capital.

Mr Potts joined Evolution along with Alon Bull and Kris "Magic" McGuire in 2002 after the trio were poached from the rival broker, Winterflood Securities. Last night it was unclear who would replace Mr Potts as head of market making.

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