Deal or no deal

28 March 2006 By Chris Hughes

The UK regulator is facing public hearings into the £750,000 market abuse fine it levied against the star GLG hedgefund manager. It may be tempted to smooth Jabre s return to work on condition he drops his appeal. But if it believes in its case, it should tough it out.

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Philippe Jabre, a star trader at GLG Partners, said he would appeal the £750,000 fine for market abuse levied by the UK Financial Services Authority in February.

Jabre was found to have traded on marketsensitive information obtained during the premarketing of a convertible bond issued by Japan's Sumitomo Mitsui Financial Group in 2003.

The fine set a new record for marketabuse punishments and was over oneandahalf times as big as the last such levy.

However, the FSA failed to prove that Jabre had violated a central principle of its code of conduct, to act with integrity. It also failed to secure a ban against Jabre working in the city.

Londonbased GLG was fined £750,000 on the grounds that it was vicariously liable because it was Jabre's employer. However, the firm's systems and controls were not subject to any regulatory punishment.

Jabre is on leave of absence from GLG and has stood down as a director of the firm. He is expected to return to work in another firm or set up a hedge fund of his own.

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