Ian Hannam has resigned as chairman of capital markets at JP Morgan following a Financial Services Authority (FSA) probe into his client dealings. Published today, an FSA decision notice says that Hannam disclosed inside information in two emails sent to a prospective client in September and October 2008. According to the regulator, the emails contained details relating to Heritage Oil Plc – an existing JP Morgan client for which Hannam was lead adviser.
An FSA statement said: “The September email contained information about a potential offer for Heritage and the October email contained information about a new oil find by Heritage. The FSA accepts that Hannam did not set out to commit market abuse, but considers that Hannam’s failings were serious in view of his experience and senior position within JP Morgan.”
Hannam had worked at the firm for two decades.
FSA acting director of financial crime Tracey McDermott said: “Inside information is extremely valuable and must be handled with care to ensure that it is properly controlled and that appropriate safeguards are observed. This applies to all market participants – but is particularly important for senior practitioners who will regularly interact with a wide circle of contacts”.
The FSA has fined Hannam £450,000.
In a statement following the release of the FSA decision, Hannam hinted that he was being made an example of. “I am appealing a decision notice issued by the FSA today and have consequently decided to resign from JP Morgan,” he said. “I will complete my current client commitments and ensure a smooth handover of responsibilities. Appealing the case while still at the firm would be an unfair distraction to my clients and colleagues.
“I have fully cooperated with the FSA from the start. It is important to note that the FSA has not challenged my fit and proper status and has accepted that I acted with honesty and integrity. It has also accepted that I was acting in the best interests of my client and no one benefited or was damaged. I strongly believe, and have been advised by my legal counsel, that the FSA’s conclusions are wrong and I look forward to challenging them in an independent tribunal.”