FSA fines Dubai based investor US$ 9.6 million for market abuse
November 9, 2011
The FSA has fined Rameshkumar Goenka, a Dubai based private investor, $9,621,240 (approximately pound;6 million) for manipulating the closing price of Reliance Industries ("Reliance") securities on the London Stock Exchange ("LSE").
This is the largest fine imposed by the FSA on an individual.
Goenka held an over-the-counter (OTC) structured product which matured on 18 October 2010 and for which the pay-out depended on the closing price of Reliance securities that day. By increasing the closing price Goenka avoided a loss of $3,103,640 under the terms of the structured product. The bank, which was the counterparty to the structured product, overpaid Goenka $3,103,640 as a result of his manipulation of the Reliance closing price.
Goenka's fine of $9,621,240 comprises a penalty of $6,517,600 (approximately pound;4 million) plus a restitution element of $3,103,640 (approximately pound;2 million). The FSA will use the restitution element to reimburse the bank which overpaid Goenka that amount as a result of his market abuse.