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An ex- IT worker at the Body Shop who used his job to snoop e-mails for inside trading information before he short-sold the firm’s shares has been fined £85,000. Charging John Shevlin with “market abuse”, the FSA said the technician knew about the group’s worse-than-expected trading figures in advance from accessing executives’ inboxes. Inside, he found e-mails containing the details of the Body Shop’s 2005 Christmas season trading results and a draft announcement that the group had underperformed. He then borrowed £29,000 (more than his salary) and established a short position equivalent to 80,000 shares via a contract for difference, effectively betting the share price would fall. Shevlin closed the position the next day, making a profit of £38,472, after the Body Shop issued a profit warning and its results, prompting its shares to slide 18%. “This trade was made on the basis of inside information,” said the Financial Services Authority, rejecting Shevlin's claim that he made the bet based on his own research. Issuing the IT support worker with a penalty of £85,000, the regulator said it had taken into account there were no prior findings of market misconduct against Mr Shevlin, who denies their case. "He abused the trust placed in him by his employers and misused his technical skills to gain a financial advantage over other market users," the FSA said. Margaret Cole, its director of enforcement, said that the case is proof the regulator will fine workers, like IT staff, even if they are outside its approved persons remit. She said: “Where individuals circumvent these protections they should expect to face significant financial or other sanctions, whether or not they are approved by the FSA.” “Mr Shevlin deliberately set out to obtain highly sensitive and valuable information to which he was not entitled.” The FSA stressed that firms must take steps to protect market sensitive information but it acknowledged that its investigation had not found the Body Shop’s security procedures to be at fault. Jul 3, 2008 Email this article Printer friendly page Previous Page
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