Failure to question information costs salesman £20,000

Sean Pignatelli, a former US equity salesman at Credit Suisse First Boston (Europe) Limited (CSFBE) has been fined £20,000 by the FSA for communicating the content of an analyst’s email without determining if it constituted inside information. The message, received on the evening of 24 May 2005, concerned a US company called Boston Scientific Corporation. It was headed ‘Good tidbit to pass around” and contained phrases like “quick heads up ahead of tomorrow’s analyst meeting”; it ended with “Don’t want to get in trouble… keep btwn us for now.” Pignatelli immediately contacted four clients, who all sold or short sold the stock. Although the FSA accepts that the trader did not have a positive belief that the information was inside when he spoke to the clients, nor was it in fact, it says that the spin he applied gave the impression that it might be. The Final Notice comments that Pignatelli “failed to heed the warning signals” and did not discuss the email internally in accordance with the firm’s compliance manual, which stated: “If you have received information which might point to insider dealing, market manipulation or market abuse DO NOT tell anyone but your Desk Head/ Senior Manager and Compliance…”