The founder of Wachtell, Lipton, Rosen & Katz on why Einhorn is all wrong.
Marty Lipton on why David Einhorn’s attempt to get Apple to distribute cash to its owners is a misuse of shareholder power
Broker fined £350,000 in Einhorn / Greenlight Capital / Punch Taverns market abuse affair – and FSA releases transcript of conference call
Full house for the FSA – David Einhorn, his hedge fund, his compliance officer, the Cazenove trading desk director and now the Merrill Lynch corporate broker have all been fined for involvement in Punch Taverns market abuse affair – as transcript of disputed conference call is released
We reported on 25 January 2011 on David Einhorn and his hedge fund Greenlight Capital being fined £7.2 million by the FSA for trading on inside information. The Financial Services Authority has today:
- Fined Greenlight’s former compliance officer and trader, Alexander Ten-Holter, £130,000 for “failing to question and make reasonable enquiries” before Greenlight sold its shares in Punch Taverns plc.
- Fined a trading desk director at JM Morgan Cazenove, Caspar Agnew, for “failing to identify” the suspicious sell orders from Greenlight.
UPDATE 16 February 2012: The Bank of America Merrill Lynch broker, Andrew Osborne, has been fined £350,000 by the FSA. A transcript of the disputed conference call has also been released by the FSA. See Broker fined £350,000 in Einhorn / Greenlight Capital / Punch Taverns market abuse affair – and FSA releases transcript of conference call.
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Einhorn/Greenlight refused to be wall-crossed, requested that they were not given any inside information, FSA accepts they did not believe they had inside information, broker also disputes that inside information was passed
The Financial Services Authority has fined David Einhorn and his hedge fund, Greenlight Capital, £7.2 million for engaging in market abuse in relation to an anticipated significant equity fundraising by Punch Taverns Plc (Punch) in June 2009. From the FSA press release:
4 December 2012 speech by Jamie Symington, Head of Wholesale Enforcement at the Financial Services Authority; covers:
- The FSA’s policy of “credible deterrence:
- Rising number of STRs;
- SMARTS software to improve surveillance and detection of market abuse;
- Build-out of enforcement capability;
- Decline in suspicious activity pre-announcement of takeovers, to 20% in 2011;
- Market abuse successes;
- An overview of the Einhorn / Greenlight Capital case;
- Thematic and educational work; and
- The future approach of the FCA.
See also: Einhorn / Greenlight Capital posts.
Following HP’s allegations of “serious accounting improprieties, misrepresentation and disclosure failures” at its recently-acquired Autonomy business, Dr Mike Lynch – the founder of Autonomy – has set up a website to provide “relevant information pertaining to the accusations made by Hewlett Packard on 20 November 2012 of financial impropriety at Autonomy”.
(“The former management team of Autonomy strongly rejects the accusations made by HP.”)
The EU short selling regime came into force on 1 November 2012, as we discussed in this post.
The Financial Services Authority has now published the first list of short positions disclosed to it under the new regime. The list can be downloaded here (box at bottom right of page).
The largest short position is Greenlight Capital’s 4.37% short in Daily Mail & General Trust plc.
For the FSA’s factsheet on the Short Selling Regulation, see here.
This long and mostly admiring article about David Einhorn in the New York Times doesn’t even make mention Einhorn’s £7.2 million fine from the FSA for market abuse; quickly forgotten in the US, if ever of interest.
Market abuse: At what point does information become sufficiently precise to be “inside information”?
In Geltl v Daimler AG the European Court of Justice ruled on 28 June 2012 on an important case for the interpretation of the UK market abuse regime. The ECJ ruling emphasises that very careful thought is required when determining at what point in an ongoing process information becomes “inside information” and potentially announceable to the market.
The UK market abuse regime is contained in Part VIII of the Financial Services and Markets Act 2000, and in its current form reflects two EU directives (2003/6 and 2003/124). The ECJ judgment is here and the accompanying press release is here.
Mr Geltl’s case
The case arose from the sale of shares by Mr Geltl, a Daimler shareholder.
Following the Einhorn market abuse case here. Clarifies that not all failed fundraisings will require a cleansing statement to the market.
Regulator emphasises that an approved person must “be the dog that barks”