UK FSA fines and bans French fund manager for market abuse

The UK Financial Services Authority (FSA) has fined Swiss-based French hedge fund manager Stefan Chaligné £900,000 and handed out a lifetime ban for market abuse.

A tribunal upheld the UK FSA decision to ban Chaligné, finding him guilty of market manipulation on nine separate occasions. 

Chaligné, fund manager of the Cayman Islands-based “Iviron” hedge fund, made large purchases in eight securities on 31 December 2007, which in the case of two companies accounted for more than two-thirds of its average daily trading volume.

He did so by placing orders via broker Cantor Fitzgerald which were designed to increase the closing price of the securities, and thereby increase the value of the hedge fund, on two key portfolio valuation dates for the fund.

The improper trades pushed the fund’s value up by £2.7m, allowing Chaligné to increase the performance and management fees paid to him by the beneficiaries of the hedge fund.

The UK FSA said Chaligné’s actions were an example of deliberate market abuse.

“Chaligné was an experienced hedge fund manager who engaged in a deliberate scheme of market abuse to benefit his own interests,” said director of enforcement and financial crime Tracey McDermott. 

“His scheme involved UK-based traders and impacted several markets across Europe and North America. The significant penalty and ban, along with the Tribunal’s comments, underscore the seriousness of his misconduct.”

Two Cantor Fitzgerald employees who placed the trades on 31 December 2007 have also been banned and given lifetime bans from the financial services industry.

Patrick Sejean, a former senior salesman on Cantor Fitzgerald Europe’s (CFE) London-based French desk, has been banned and fined £650,000. 

Tidiane Diallo, a former junior trader on the same desk, was also banned but avoided a proposed £100,000 fine because of financial hardship.


This article was first published on Investment Week

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