On 25 January 2012 the UK Financial Services Authority (the FSA) sent a strong message to financial markets participants by fining hedge fund manager David Einhorn and his fund, Greenlight Capital (Greenlight), with a £7.2m fine for market abuse. Einhorn will personally pay £3.6m, the second largest fine ever paid by an individual for this offence.

This FSA decision requires professionals in the financial services sector with access to inside information to take note. From Einhorn’s statement criticising the actions of the FSA, and the reaction of the financial press it appears that there is a lack of awareness about the statutory test for market abuse. The test is not only, “did they know” (as Einhorn thought) but also “should they know”.