City watchdog bans Archer's son for life over share-deal deception

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James Archer, the younger son of the now imprisoned Jeffrey Archer, devised an elaborate charade to mislead an investigation into stock market manipulation and his first reaction when challenged over it "was to lie".

In one of the most strongly worded judgments to emerge from the Securities and Futures Authority, a financial regulator, 27-year-old Mr Archer was yesterday banned for life from working in the City of London. The penalty, the most severe in the SFA's arsenal, was not accompanied by a fine because Mr Archer did not benefit personally from his misdemeanours, although he must pay £50,000 towards costs.

Mr Archer's downfall had more to do with an assiduous cover-up than with the initial transgression. He had traded shares with himself on the Stockholm Stock Exchange (SSE) in 1998, to force down the value of its equivalent on the FTSE-100 share index.

The tribunal which imposed the lifetime ban said that Mr Archer's misconduct was aggravated by the "persistence and guile of [his] attempts to deceive" investigators.

The affair dates back to December 1998, when Mr Archer was a member of the high- flying "Flaming Ferraris", a group of traders named after an expensive cocktail served in the Nam Long restaurant in London. The traders' success saw them receive annual bonuses exceeding £1m.

The other Ferraris, Adrian Ezra, 30, and David Crisanti, 37 and head of Mr Archer's department, were also expelled from the City yesterday for participating in the cover-up.

The SSE's suspicions were aroused when Mr Archer conducted consecutive, large sell and buy orders for shares in Stora, a Swedish paper firm. It contacted his employer, the investment bank Credit Suisse First Boston (CSFB), and Mr Archer pretended the trading was a mistake. He even "devised an elaborate charade", the tribunal said, involving an imaginary client. The pair rehearsed the fake deal on the dealing phones of CSFB, which tapes its calls.

The truth began to unravel when the SSE ordered the Swedish broker to provide the paperwork for the original trade. That prompted a demand for a fuller explanation from CSFB. The investigating tribunal said yesterday that Mr Archer's "first reaction when questioned by the SSE was to lie".

However, the traders broke ranks as CSFB did an internal investigation. Mr Crisanti admitted knowing about the attempt to cover up the trades when he learnt that Mr Archer had implicated Mr Ezra in the affair. All three were dismissed in March 1999. But the tribunal at the SFA concluded that the Ferraris "had still not been fully frank and honest" despite admitting to lies.

Eversheds, Mr Archer's solicitors, said that he had no comment to make. Stripped of this livelihood, it is unclear what Mr Archer plans to do next. Technically, he is free to reapply for SFA registration, although he must prove he has been "rehabilitated". But an SFA spokesman said expulsion meant an offence was so serious that "we cannot conceive of a time-limit after which someone could be employed again".