The Financial Services Authority (FSA), the City watchdog, today fined a former hedge fund manager at Moore Europe Capital Management £52,500 in the first case of its kind involving credit markets.

Steven Harrison, a former portfolio manager for Moore Credit Fund, also agreed not to trade for 12 months after he received inside information that Rhodia, a French chemicals company in which his fund held bonds, was about to refinance its debt.

Mr Harrison, who accepts that he received inside information but did not realise it at the time, instructed a colleague to buy two million Rhodia bonds that were subsequently repurchased at a premium by the company during the refinancing.

The deal, in which Mr Harrison made no personal gain, netted a €44,000 (£35,488) profit for his fund.

Margaret Cole, director of enforcement at the FSA , said: "This case highlights the importance of city professionals taking care to recognise inside information when they see it and not to misuse it."

She added: "Hedge fund managers and people in similar roles are often legitimately provided with inside information in the course of their business.

"The FSA expects people entrusted with such responsibility, in the credit markets as much as in any other regulated markets, to observe high standards of conduct and not to take advantage of their privileged access to inside information.”

The FSA accepts that Mr Harrison’s conduct was not deliberate.

His fine was reduced from £75,000 because he co-operated with the FSA’s investigation.

Moore Europe Capital Management is part of Moore Capital, a US fund run by billionaire investor Louis Bacon, which is reported to manage $15 billion.

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