The government of the semi-autonomous Kurdish region of Iraq has confirmed that it received emails from a senior JP Morgan banker that the UK financial regulator said constituted market abuse.
The banker, Ian Hannam, who was JPMorgan's London-based global chairman of equity capital markets, was later fined 450,000 pounds by the Financial Services Authority (FSA) and has since resigned.
Sources had told Reuters on Friday that Ashti Hawrami, Minister of Natural Resources for the Kurdistan Regional Government (KRG), was the previously unidentified Mr. A who received emails from Hannam containing privileged information on the banker's client, Heritage Oil. The FSA said the information could have been used to unfair advantage in the markets.
The KRG said it had contact with Hannam at various levels during the period when the emails were sent.
The KRG confirms that the information identified by the FSA contained in the two emails was unsolicited, and further confirms that neither the KRG, nor any representative of the KRG, responded to that information or took any action as a result of that information, it said on Saturday.
The first email, sent in September 2008 to Mr A, contained information about a potential takeover bid for Heritage, while a second, a month later, was sent to Mr. A and an unidentified Mr. B and included information on an oil find Heritage had made.
The FSA said the email to Mr. A represented a serious matter partly because Mr. A could have advised his organisation to buy a stake in Heritage.
Around the time of the emails, the KRG did buy a stake in another Kurdish-focused explorer, Norway's DNO International.
Hannam, a gruff former special forces soldier, is one of Britain's most successful investment bankers and is appealing against the fine.
Heritage has declined requests to comment on the matter.
The Kurdish region has emerged as an area of keen interest for international oil companies after years when it was mainly only a focus for small, independent players such as Heritage.
However, the area's image has been damaged by a series of high-profile lawsuits and regulatory probes in Norway and the UK.
A spokesman for the KRG declined to provide further details on the matter.
The KRG considers this to be a UK regulatory matter between the FSA and Mr Hannam, and has nothing further to add, the statement added.
Spokesmen for Hannam and JPMorgan have declined to comment.
(Additional reporting by Sarah White; Editing by Will Waterman)