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Market abuse confession costs oil executive record fine

Voluntary admission of trading on inside information has cost Mehmet Sepil, CEO of Genel Energi, a Turkish oil exploration company, £967,005, the highest penalty for market abuse levied so far by FSA. At the end of March 2009, Genel Energi entered a joint venture with Heritage Oil Plc, listed in London, to explore the Miran oil field in Kurdistan. Sepil, Murat Ozgul, Genel Energi’s chief commercial officer, and Levent Akca, the firm’s exploration manager, were privy to the detailed and highly price sensitive results of drilling tests conducted in April 2009, finishing on 3 May 2009. On 5 May 2009, all three purchased shares in Heritage, which announced a “Major Oil Discovery” of 2.3bn to 4.2bn barrels a day later. The company’s share price rose 25% on the news and Sepil, Ozgul and Akca promptly sold their shares for a substantial profit. Three months later, the men owned up to the FSA, “expressing remorse”, and agreed, at an early stage, to give up the profits on the trades. Cooperation and the quick offer to disgorge the gains they had made earned all three a 30% discount on their fines – the figures exclude the profits they returned. Ozgul paid £105,240 (his profit was £35,240) and Akca was fined £94,062 (against profit of £10,062). Sepil’s profit was £267,005.