FSA fines father and son £180k for market abuse

A father and son have been fined by the Financial Services Authority (FSA) for market abuse.

Jeremy Burley and his father Jeffery Burley were fined £144,200 and £35,000 respectively for engaging in market abuse in relation to the shares of Tower Resources, an oil and gas exploration company, in June 2009.

Jeremy Burley’s penalty included disgorgement of the £21,700 financial benefit he made as a result of the market abuse. 

The FSA said the size of Jeremy Burley’s fine reflects his lack of co-operation with the FSA during the course of the investigation.

The fines relate to activities undertaken by the pair when Jeremy Burley was managing director of BMS Minerals, a Ugandan company which provided vehicles and equipment to oil and gas exploration companies in Uganda, including Tower Resources.

Jeffery Burley, a retired forestry expert, opened and managed a share trading account in the UK, which he used to trade on his son’s behalf.

Through his employment Jeremy Burley acquired inside information in relation to Tower Resources’ first oil well in Uganda, which indicated the drilling looked unlikely to produce oil and that the exploration of a second well was unlikely to proceed.

Before this news was announced on 15 June 2009, Jeremy Burley passed the inside information onto his father and another person and instructed his father to sell his entire holding of 790,000 shares in Tower Resources.

Burley also advised his father to sell the shares in multiple lots so as to try and avoid the attention of the regulator.

Jeffery Burley sold the 790,000 shares in Tower Resources immediately and in so doing avoided a loss of £21,700. 

Margaret Cole, director of enforcement and financial crime at the FSA, said the case should serve as a reminder that abuse of inside information does not pay.

‘Extraction of natural resources often involves many independent contractors. This case should serve as a reminder to those in that industry that abuse of inside information, however obtained, will not pay,’ she said.

The Burley’s both agreed to settle the case at an early stage and therefore qualified for a 30% discount under the FSA’s executive settlement procedures. Had the fines not been discounted, Jeremy Burley would have been fined £175,000 in addition to the disgorgement of £21,700 and Jeffery Burley would have been fined £50,000.