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Not insider dealing? What is it then?

David Einhorn’s claim that his fine was unjust defies belief. What was information on a large equity issue by Punch?

David Einhorn’s argument that he did nothing wrong by selling shares in Punch Taverns in June 2009 doesn’t convince, to put it mildly. OK, the hedge fund manager asked not to be given any inside information. The trouble is, the company’s broker (understood to be a representative of Bank of America Merrill Lynch) then proceeded to give him a variety of titbits that would be extremely interesting to the owner of 13.3% of Punch’s shares.

The fact that Punch was contemplating a large issue of equity – £350m was mentioned on the phone call – surely meets every common-sense definition of price-sensitive information. Einhorn’s grumble that “the fine is for trading in advance of a decision that had not been made” is disingenuous. The mere fact that Punch’s broker was talking numbers suggested the company was close to pressing the button on the fundraising. If in doubt, don’t trade.

It’s extraordinary that a high-profile investor didn’t see that simple point – and still claims not to. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds