The UK's Financial Conduct Authority has fined a man £35,212 for insider dealing.

Kenneth Carver, a retired accountant, purchased 62,000 shares in Logica Plc because Ryan Willmott, a family friend, provided him with some inside information relating to a potential takeover of Logica through his employment at the group.

On 31 May 2012 CGI Inc publically announced its intention to make a cash acquisition of Logica at a significant premium, which caused the share price to increase by 59.8%. Shortly after the announcement Mr Carver sold all his shares, making a profit of £24,206.70.

The FCA says that Carver knew that there was a risk of market abuse and traded anyway, using his own funds to place a trade on Willmott’s behalf and knew that Willmott had a financial incentive to persuade him to trade. Willmott pleaded guilty to insider dealing on 26 February 2015 and on 27 March 2015 was sentenced to 10 months imprisonment.

When asked why the old man who performed the actual trade received a lighter punishment than his friend who did not, an FCA spokesman waffled: "We felt Willmott strayed into illegality. In situtions like this you have to make a judgment-call. You have to consider what is the most appropriate route to go down."

When asked what software picked the trade up, the spokesman said that the FCA preferred to keep things mysterious. He did, however, say that it could have been either of two systems: (i) one that takes a record of all transactions in real time before an announcement is made to the market and (ii) reports that the FCA gets from the trading platforms. Would he have been picked up if he had not been a 'stag', i.e. if he had not sold his shares very shortly after buying them? The spokesman said that "in these cases, the initial transaction is the suspicious one," which sounds like a 'no.'

Carver gave significant co-operation and provided a detailed account of events at an early stage of the investigation alongside evidence of serious financial hardship to the FCA. Carver also settled at an early stage of the Authority’s investigation. Had it not been for this, the Authority would have imposed a financial penalty of £122,212.

As readers of our monthly PDF will know that Sara George of Stephenson Harwood, who defends people against FCA decisions in the Upper Tribunal, believes that "the early settlement discount is, by and large, not worth the paper it is written on."