Ex-Cantor Traders Fighting FSA's Market-Manipulation Fine
By Lindsay Fortado-Apr 17, 2012 7:20 AM ET
Two former Cantor Fitzgerald Europe traders accused of committing market abuse are challenging the U.K. finance regulator’s decision to fine them and ban them from working in the industry.
The trial focuses on stock trades on Dec. 31, 2007 and Jan. 31, 2008, by Cantor Fitzgerald Europe traders including Cheickh Tidiane Diallo and Patrick Sejean, according to papers filed by the Financial Services Authority for a trial that began today in London. They were trading on the instructions of Stefan Chaligne, an equity-fund investment manager.
“This is quite serious and blatant market abuse on two occasions,” a lawyer for the regulator, Andrew Mitchell, said at the opening hearing.
Chaligne “instructed CFE to buy stock with the goal of raising the price” of a company in which the fund already held shares, the FSA said in the court papers. The trades were done “on those particular dates,” because they were the days on which performance fees for Chaligne were decided, based on the fund’s value, according to the agency.
Chaligne is also challenging a 1.17 million-pound ($1.87 million) penalty and ban from working in the finance industry as part of the case that went to trial denying he intentionally committed market abuse, according to the FSA.
Sejean said that, while he accepts a penalty is appropriate, his 550,000-pound fine should be cut to below 10,000 pounds because of financial hardship. Diallo is fighting a ban because he says it is too severe, the FSA said.
Diallo worked for Cantor Fitzgerald from 2006 until April 16, 2011, in a customer trading role, according to the FSA register. Sejean worked for the firm from 2002 until March 16, 2011.
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