2/19/2026 4:39:28 PM | 4 minute read

Notice in a nutshell: FCA fines oil rig consultant for insider dealing

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Katie Stephen

Co-Head of the Contentious Financial Services Group

Get in touch

Katie Stephen

Co-Head of the Contentious Financial Services Group

Last month, the Financial Conduct Authority (FCA) published a Final Notice to Russel Gerrity, imposing on Mr Gerrity a financial penalty of £309,843 as a result of trading activity he carried out after he had had access, in his consultancy role, to inside information about drilling results.

Key takeaways

Key takeaways from the Notice are set out directly below, but for more details on the findings see our ‘Notice in a nutshell’ table beneath these:

Pursuit of civil sanctions: This case is another example of the FCA pursuing a civil market abuse penalty, as opposed to criminal insider dealing (see also Notice in a nutshell: Neil Dwane). This approach may have advantages for the FCA such as delivering an outcome more quickly than a criminal prosecution and in circumstances where the supporting evidence might be more open to challenge, particularly where the individual is prepared to agree a settlement.
Legal presumptions applied: Under the UK Market Abuse Regulation (UK MAR), the FCA can make a presumption that a person in possession of inside information used it when engaging in trading activity. Although this presumption is rebuttable, the onus is effectively on the individual to provide a convincing explanation for their decisions demonstrating why, for example, they would have traded in any event i.e. even if they had not been in possession of the information.
Factual inferences drawn: The FCA is prepared to draw inferences from the facts such as a person having access to inside information through being at a particular location and/ or interacting with other people with access to the information. These circumstances combined with the timing of particular trades can be sufficient for the FCA to conclude that insider dealing took place.
FCA’s data sources: The FCA continues to make use of transaction reports and its own market surveillance tools to detect market abuse. The FCA indicated in its press release that it was initially notified of some of Mr Gerrity’s trading through Suspicious Transaction and Order Reports submitted by a firm and that further instances were detected by the FCA’s systems in which Mr Gerrity used multiple accounts with different brokers.
WhatsApp: The FCA’s reference to a WhatsApp message sent by Mr Gerrity is a further reminder of the FCA’s investigatory powers to obtain, review and rely on relatively informal communications in the context of enforcement action.
Avoidance of losses: Selling shares ahead of a negative announcement in order to avoid losses can give rise to insider dealing as well as buying them so as to profit from an increase in the share price.
Territoriality: The FCA concluded that Mr Gerrity was in breach of UK MAR notwithstanding that some of the activity took place whilst Mr Gerrity was based offshore and outside the UK.
Policies and procedures: Firms should ensure that relevant policies and procedures apply to and are communicated effectively to third party consultants as well as employees. However, they should not assume compliance even where individuals are reminded that they have been provided with inside information and should not trade.

Key information

Decision maker	FCA Settlement Decision Makers
Individual	Russel Gerrity, an experienced Petrophysical Consultant
Related Material	None
Sanction	£309,843 including 30% settlement discount. The calculation included a disgorgement of the financial benefit derived directly from the abuse (including “secondary benefit”) and applying a multiple of 3 to the profit made.
Settlement	Yes
Provisions	Article 8 and Article 14 of UK MAR (Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse as amended by the Market Abuse Exit Regulations 2019)
Relevant period	October 2018 to January 2022
Factual findings	Mr Gerrity had a private company, of which he was a director, which entered into contracts with a private consultancy firm in which it was agreed that Mr Gerrity would provide services to the firm’s clients. Mr Gerrity was also the firm’s Operations Manager whereby he was responsible for training new consultants and ensuring they understood its policies. The firm’s Code of Conduct stated that it applied to all consultants and that consultants should also comply with codes of conduct and business ethics of clients when working on projects. The Code included reference to insider dealing being unlawful. Some clients also had internal policies containing reminders on not dealing when in possession of inside information and Mr Gerrity also received communications about being added to an insider or confidential list. The FCA concluded that, on four occasions, Mr Gerrity dealt in shares while in possession of and using inside information relating to drilling results at oil wells in which the relevant issuer had an interest. He sold shares before negative news was announced and bought shares before positive results were made public. On one occasion, the FCA does not appear to have identified evidence that Mr Gerrity received emails or other formal notification regarding the drilling results. However, the FCA concluded that he had access to and was entitled to information through his role as a consultant, including from having visited the drilling site and having access to areas where individuals with inside information were working. The FCA also identified: (i) a WhatsApp message Mr Gerrity sent whilst on site which made reference to next steps consistent with a lack of positive drilling results “unless they hit lucky in next 3 or r [4] hours”; and (ii) some emails less than 2 hours before he traded which referenced cancellation of personnel and removal of kit which the FCA concluded could only have taken place in a negative scenario.
Failings	In each case, the FCA considered that the technical information available to Mr Gerrity would have caused a significant impact on the share price if it had been known to the market, taking into account the impact of certain announcements made after Mr Gerrity traded. In finding that Mr Gerrity used inside information when trading, the FCA took into account the absence of any alternative explanation from Mr Gerrity regarding the timing of a particular trading decision and relied on the presumption contained in Recital 24 of UK MAR which allows use of inside information to be presumed where a person in possession of inside information deals in the instrument to which the information relates. The FCA concluded that Mr Gerrity’s conduct amounted to insider dealing as described in Article 8 UK MAR and contrary to Article 14 UK MAR.