David Einhorn, the high-profile American hedge fund manager who foresaw major problems at Lehman Brothers before the Wall Street bank collapsed, got a 3.6 million pound fine in Britain on Wednesday for trading on inside information.
Britain's Financial Services Authority (FSA) fined Einhorn and his Greenlight Capital Inc firm a total of 7.2 million pounds for market abuse in relation to an anticipated equity fundraising by Punch Taverns Plc
Einhorn himself got a 3.64 million pound fine, while the Greenlight Capital company was fined 3.65 million pounds.
The FSA said that on June 9, 2009, Einhorn was a party to a telephone conference in which it was disclosed to him by a corporate broker acting on behalf of pubs group Punch Taverns that Punch was at an advanced stage of the process towards a significant equity fundraising.
A matter of minutes after the telephone conversation had concluded and on the basis of that inside information, Einhorn gave instructions to sell all of Greenlight's holding in Punch.
At the time these instructions were given Greenlight held 13.3 percent of Punch's issued equity, and over the next four days Greenlight sold 11,656,000 Punch shares, thereby reducing its holding in Punch from 13.3 percent to 8.89 percent. ($1 = 0.6416 British pounds)
(Reporting by Sudip Kar-Gupta; Editing by Elaine Hardcastle)