The Upper Tribunal (Tax and Chancery Chamber) (the “Tribunal”) has directed the FSA to fine Stefan Chaligné, a Swiss-based hedge fund manager £900,000, (plus disgorgement of the financial benefit he obtained of €362,950) and Patrick Sejean, a former senior salesman on Cantor Fitzgerald Europe’s (CFE) London-based French desk £650,000. Chaligné, Sejean and a third trader, Tidiane Diallo, have in addition been banned by the FSA from performing any role in regulated financial services, at the direction of the Tribunal.

Chaligné recruited the assistance of Sejean and Diallo in manipulating the share price of securities in the hedge fund he was managing, thus increasing the value of the hedge fund on portfolio evaluation dates. This practice, known as “window dressing the close”, was achieved by Chaligné placing orders through CFE, effected and executed by Sejean and Diallo, which were designed to increase the closing price of nine securities traded on European and North American exchanges. The practical effect of his market abuse was to increase the performance and management fees paid to him by the beneficiaries of the hedge fund.

The Tribunal described this as “as serious a case of market abuse of its kind as one might conceive”.