Banned broker faces bankruptcy for failing to pay £2.8m fine

The Financial Services Authority is taking an increasingly punchy approach to regulation

Simon Eagle, the former stockbroker fined a record £2.8m by the Financial Services Authority for market abuse last month, has missed the deadline to pay the charge and will now be pursued by the regulator, which could possibly end in the banned financier's second bankruptcy.

Mr Eagle, who was described by the FSA as a "dishonest cheat" for deliberately ramping a company's share price, was landed with the highest fine ever imposed on an individual by the City regulator, while simultaneously being banned from working in the financial services sector.

He said: "No [I haven't paid the fine]. I don't have the money. I guess they'll make me bankrupt again ... I'm working at the moment driving a van. I've been to pick up some furniture in Germany and I'm just coming back. There won't be enough money [from this job] to pay the fine."

The FSA declined to comment on its next move, but in similar cases the regulator typically makes one more direct request for payment, before triggering the legal process.

A notice released by the FSA when it imposed the fine, said: "If all or any of the financial penalty is outstanding on 1 June 2010, the FSA may recover the outstanding amount as a debt owed by Mr Eagle and due to the FSA."

The fine followed an investigation lasting almost six years. It was levied after the FSA said Mr Eagle had run "a complex and prolonged abusive scheme" during 2003 and 2004, when he was attempting to take over Fundamental-E Investments (FEI), an Aim-listed company. Having agreed to buy 85 per cent of FEI's shares, Mr Eagle wanted to hold just 10 per cent personally, so had to find further buyers.

He acquired the stockbroker, SP Bell Limited, and used it to sell millions of pounds of FEI shares to its clients – sometimes without their knowledge – generating demand for the stock and pushing its price up.

During that period, Mr Eagle chased up FEI's share price from 2.5p to 11.75p – a movement achieved with the assistance of the international capital markets firm Winterflood Securities, which was also fined £4m.

The situation emerged in July 2004, when a takeover of SP Bell collapsed, which led to Mr Eagle's being declared bankrupt. By that stage, Mr Eagle had received more than £1m in commission and a seat on FEI's board.

The case is another example of the FSA's increasingly punchy approach to regulation, which has resulted in almost £50m in fines being collected so far this year.

Last week the US investment bank JP Morgan became the latest to be hit by an FSA fine, when it received the single largest financial penalty ever handed out by the regulator after admitting that it had accidentally put as much as £16bn of client money at risk by placing the cash in the wrong account.