It’s a cautionary tale for aspiring City spivs. An analyst gets in touch to relay some information, talking up their connections – you, in turn, lay it on thick with your clients. But the internal compliance team takes a dim view, your firm shops you to the regulator and they then hit you with a hefty fine.
Sean Pignatelli, who was working at CSFB last year as a US equity salesman, is today nursing the loss of £20,000 after passing on what, in fact, turned out to be public information. According to the FSA’s final notice, an analyst emailed him in May 2005 to pass on a “quick heads up ahead of tomorrow’s analyst meeting.” The analyst had “just sat down” with the CEO of Boston Scientific – but added “don’t want to get into trouble….keep btwn us for now.”
Actually the email contained no inside information.
But Mr Pignatelli hit the phones. “During these calls he used language that embellished the information in such a way that the FSA considers that he gave the impression that the email contained inside information.” Result- £20,000 worse off.
Fortunately for Mr Pignatelli, the FSA now models itself on the parking authorities – as General Reinsurance learnt yesterday. As with parking tickets, discounts are available for prompt payment so this outsider dealer’s fine could have been £25,000.
Coming a day after Warren Buffett’s reinsurance business was fined £1.225m by the FSA for what seemingly amounts to a similar transgression – “due skill, care and diligence,” etc – Mr Pignatelli may feel a little hard done by.
Gen Re’s fine amounts to a tiny percentage of Berkshire’s $81.7bn (about £42.7bn) revenues last year. Mr Pignatelli would have to be on a hefty pay packet to make his fine comparable – somewhere in the region of £700m.