FSA fines Winterflood £4m over market abuse
The Financial Services Authority has provisionally fined Winterflood Securities £4 million, the biggest penalty for market abuse imposed on a regulated financial firm, it emerged yesterday.
Winterflood, which is owned by Close Brothers, the investment bank, was fined over share dealings in an AIM-listed company called Fundamental E Investments (FEI) that took place in 2004. Winterflood denied the allegations yesterday and said it had referred the case to the Financial Services and Market Tribunal for a formal ruling.
The authority said: The FSA alleges that Winterflood failed to have appropriate regard to warning signs and failed to ask questions about the propriety of the third-party trades in FEI executed by Winterflood, and thereby committed market abuse. It is not alleged that Winterflood or its traders deliberately committed market abuse. The traders concerned, who were not named yesterday, still work at the firm.
Winterflood said that it had already made provisions to cover the fine and that the penalty would not hit its financial results or those of Close.
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If the tribunal rules in favour of the fine, it would mark one of the regulators biggest financial penalties and the highest against one of the City firms it regulates.
In August 2004, the authority fined Royal Dutch Shell, the Anglo-Dutch oil giant, a total of £17 million for market abuse and breaching listing rules after the oil group overstated the level of its oil reserves.
The Winterflood fine covers trading in FEI during 2004, when it was chaired by Simon Eagle, a former commodities trader who was also chief executive of SP Bell, a regional stockbroker.
The FSA began an investigation into trading in FEI shares after the companys price tripled over a four-month period. The shares slumped once the investigation was announced by the regulator. Having reached 12p, they fell to 2p.
Winterflood said that it was a market-maker in FEI at the time and executed most of the relevant trades. Mr Eagle resigned as chairman of FEI. SP Bell later fell into administration.
The FSA declined to comment beyond acknowledging that Winterflood had appealed against one of its rulings. Winterflood and Close declined to comment beyond the wording of a statement to the Stock Exchange.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
