Stay informed with free updates
Simply sign up to the UK financial regulation myFT Digest — delivered directly to your inbox.
The UK financial watchdog has fined a former advertising executive and his friend who profited from a key contract announcement, the fourth time in as many months that it has taken action over insider trading.
The Financial Conduct Authority said Bhavesh Hirani bought shares for his friend in his employer Bidstack Group, an Aim-listed company that places adverts inside computer games, ahead of its 2021 announcement of a contract with a large video game publisher.
Hirani opened a trading account in the name of Dipesh Kerai, whom he has known since childhood, and purchased shares in Bidstack using his friend’s money. The shares more than doubled in value after the contract was announced.
The enforcement action is the fourth time since October that the FCA has taken action over insider trading. In January, it fined an oil and gas consultant for trading ahead of the announcements of drilling results by the companies he was advising.
In November, the watchdog brought criminal charges against a former employee of US investment bank Jefferies International for allegedly telling a friend about a takeover he was advising on.
It also fined an executive at a clean energy company in October for selling his shares and those owned by his family ahead of a disappointing trading update that hurt the group’s market value.
The FCA said Kerai denied receiving any inside information from Hirani. It said Hirani also denied disclosing any such information to his friend or having encouraged him to trade in Bidstack shares on such a basis.
The watchdog said it had “not identified any evidence of direct profit sharing, profit distribution or repayment of profit” between the two men after trading in Bidstack shares.
However, the regulator said it was “satisfied that Mr Hirani was in possession of the inside information . . . and that he used this inside information to purchase the Bidstack shares”, and he had therefore breached UK market abuse regulations.
It fined Kerai £52,731 and Hirani £56,000. Steve Smart, executive director of enforcement and market oversight at the FCA, said the two men “exploited inside information for their own gain, trading on details other investors couldn’t have known”.
Smart also expressed “big thanks” to a company that reported its suspicions to the authority through its Suspicious Transaction and Order Reports. “Working with industry we will continue to take action against anyone who misuses inside information and undermines trust in UK markets,” he said.
Bidstack was liquidated last year after being put into administration. Hirani and Kerai could not be reached for comment.