UK regulator levies highest-ever fine against Dubai investor

The UK finance regulator fined Dubai-based investor Rameshkumar Goenka $9.6 million for market abuse, its largest-ever fine against an individual.

Goenka manipulated the closing price of Reliance Industries Ltd securities on the London Stock Exchange by executing a high volume of orders in the final seconds of trading to inflate the payout on a structured product tied to the closing price, the UK Financial Services Authority said in a statement today.

“The impact of such behaviour goes far beyond one counterparty,” said Tracey McDermott, the acting director of enforcement for the FSA. “Market confidence will suffer if participants cannot be satisfied that the price of quoted securities reflects the proper interplay of supply and demand.”

The fine includes a penalty of around $6.5m and restitution to reimburse the bank $3.1m, which overpaid him as a result on the structured product. Goenka received a 30 per cent discount for settling the case, the FSA said.

The regulator’s previous highest fine was against Simon Eagle, the former head of Fundamental-E Investments Plc and brokerage SP Bell Ltd. He was fined £2.8m ($4.5m) in May 2010 over a share-ramping scheme.