Originally posted on sheriffsofgurus October 31st 2014
We have been alerted by SpreadBet magazine about a potential case of insider dealing by a blogger called Daniel Levi. He claims to be a share tipster and a trawl through his “tips” suggests that he tips for bankruptcy.
The company in question is UK Oil and Gas who have an interest in the Horse Hill Development. Daniel Levi owns shares in the company and announced via his blog and twitter that there had been an oil strike and that it was about to be declared commercial. The oil strike was correct but the news was yet to be officially announced to the market. Also the strike was not in fact declared commercial or of the substantial size Daniel Levi boasted about at the time.
So the questions here are firstly how did Daniel Levi know in advance of this oil strike and then announce it publicly before the company did to the market. Did he or his associates deal in shares leading up to this. There was a 70% spike in the share price before it then crashed back down again. The typical signs of a “pump and dump” operation. The accusation is that he or his associates bought before the spike that he created and then sold into it. They knew of the oil strike but also knew that it was not “commercial” so bought and sold with this information to net themselves a profit. This is fairly similar to what the city slickers used to do in the Daily Mirror before being tried an found guilty of insider dealing and market abuse.
Even if there was no trading with the information obtained it seems to be a clear case of market abuse.
It is either
“Dissemination – giving out information that conveys a false or misleading impression about an investment or the issuer of an investment where the person doing this knows the information to be false or misleading.”
Or
A person will commit the criminal offence of insider dealing if they have inside information and:
- that information is price-sensitive in relation to shares;
- they deal in those shares, or encourage someone else to deal in those shares or pass inside information to another person;
- the dealing takes place on a regulated market or through a professional intermediary such as a broker. (Included in the definition of a regulated market are exchanges elsewhere in the EU and some other overseas markets.)
If the FCA are aware of Daniel Levi’s actions here then they should be investigating.
Thanks to SpreadBet magazine for uncovering this potential case of market abuse.
We had a look through this “tipsters” tips, he basically seems to be a nobody with an appalling record. No wonder he is resorting to alleged market abuse. You could almost pity him but if the allegations are true then he has stolen money from people and should be fined and jailed.
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