David Einhorn (hedge Fund Manager) - U.K. Insider Dealing

U.K. Insider Dealing

In January 2012, the U.K. Financial Services Authority (FSA) fined Einhorn and Greenlight Capital $11.2 million for allegedly trading on inside information. The FSA claimed Einhorn obtained information on the Punch Taverns Plc (PUB) equity fundraising by a broker representing the company prior to public knowledge of the event. Within minutes of receiving the information, Einhorn sold more than 11 million shares over the following four days, avoiding a 29.9% stock price collapse and subsequent loss of about ￡5.8 million.

The FSA stated: "The FSA accepted that Einhorn’s trading was not deliberate because he did not believe that it was inside information. However, this was not a reasonable belief. " "This was a serious case of market abuse by Einhorn and fell below the standards the FSA expects, particularly due to Einhorn’s prominent position as President of Greenlight and given his experience in the market." “Einhorn is an experienced professional with a high profile in the industry. We expect someone in his position to be able to identify inside information when he receives it and to act appropriately. His failure to do so is a serious breach of the expected standards of market conduct. It is highly damaging to market confidence when privileged shareholders commit market abuse, and the high penalty reflects the seriousness of his breach.”

Einhorn called the fine "unjust" and "inconsistent with the law" but said he would pay it "rather than continue an arduous fight" The fine was the second largest levied on an individual in the history of Britain’s Financial Services Authority.