The Financial Conduct Authority (FCA) recently confirmed that over 75 percent of its enforcement work focuses on fighting financial crime. In line with this, earlier this year the FCA issued Final Notices to AIM listed company interim Chief Financial Officer (CFO), Bhavesh Hirani, and his friend, Dipesh Kerai, imposing financial penalties for insider dealing and, in Mr Hirani’s case, unlawful disclosure of inside information.
More details on the findings in this case are set out in the table below but our key takeaways are as follows:
Key takeaways
- Circumstantial evidence: When considering whether there has been actual or attempted market abuse, firms should look at all the surrounding circumstances. In this case, despite there being no direct evidence of inside information having been unlawfully disclosed by the CFO to his friend, the FCA considered that there was sufficient circumstantial evidence to conclude that such information was shared during a telephone call and/or a meeting between them. Their pre-existing close relationship, in which both individuals shared matters of a personal financial nature, was a relevant factor, as was the timing of communication between them shortly after the CFO received relevant information and internet activity after the relevant trading in which the CFO visited webpages related to insider dealing. The case serves as a reminder that communications, including WhatsApps, can be obtained by the FCA and used as part of the evidential matrix to build a case notwithstanding any direct record of a disclosure of inside information and even where the individuals decline to answer FCA questions.
- Critical role of STORs: The FCA was initially notified of the relevant trading through Suspicious Transaction and Order Reports (STORs) submitted by a firm, which the FCA states shows the vital role of industry in uncovering market abuse. The case is a reminder for firms and trading venues that they should be reporting suspicious ‘orders’ as well as suspicious transactions and 'attempted market abuse'. Data published earlier this year shows that the FCA received 3,806 STORs in 2025. The case also illustrates the FCA’s data driven approach and use of STORs to identify and investigate unusual activity.
- Continued focus on market abuse: In terms of the FCA’s approach to market abuse, the case serves as a reminder of: (i) the FCA’s continued focus on tackling market abuse misconduct through civil enforcement (rather than pursuing a criminal prosecution); (ii) the fact that significant financial penalties can be imposed (in addition to disgorgement of any profit) (the FCA is consulting on increasing the minimum penalty for the most serious cases of individual market abuse to £150,000 with automatic adjustments every two years); and (iii) that disclosure of information to a friend who then deals on the basis of the information is itself market abuse and subject to the same penalty framework.
More broadly, the FCA recently published its annual report and accounts for 2025/26 which confirmed that the FCA imposed £1.77 million in fines for 12 individuals last financial year for insider dealing, market manipulation and making misleading statements. The FCA also fined firms approximately £14.4m for transaction reporting failures, control weaknesses and publishing inaccurate information. In addition, in line with its continued focus on assertive supervision, the FCA took supervisory action, including nine market abuse supervisory visits.
Firms should continue to prioritise investment in their systems and controls in this area, including utilising new technology as it becomes available, so that they are well placed to spot red flags, as well as respond effectively should the FCA raise queries.
Key information
Decision maker | FCA Settlement Decision Makers |
Individuals | Mr Bhavesh Hirani and Mr Dipesh Kerai |
Related material | None |
Sanction | Financial penalties of £56,000 for Mr Hirani and £52,731 for Mr Kerai (after 30 percent stage 1 settlement discount). Despite the minimum penalty for market abuse being £100,000, reductions were made for proportionality. |
Provisions | Article 14(a) of UK MAR prohibits a person from engaging in or attempting to engage in insider dealing. Article 14(c) of UK MAR prohibits the unlawful disclosure of inside information. |
Factual findings | Mr Hirani was the interim CFO for AIM listed company, Bidstack Group plc (Bidstack), and Mr Kerai was his close personal friend. In October 2021, Bidstack began discussions with a third party around a possible deal which would be positive for Bidstack. The CFO was involved in the potential deal, including attending a Board meeting on 18 November 2021 at which the deal was discussed. Senior colleagues opined that, from this point in time, information relating to the deal was inside information. On 1 December 2021, the CFO was sent a spreadsheet which appeared to detail the revenue potential which could be generated through the deal. On 9 December 2021, the CFO was copied on numerous emails concerning the progress of the deal, including emails attaching drafts of an RNS announcement which reported, amongst other things, that Bidstack had agreed a deal with the relevant counterparty. On the same day, the CFO and his friend spoke on the phone and exchanged messages agreeing to meet up that evening. The deal was signed late on the evening of 9 December 2021. The following day, 10 December 2021, whilst there were continuing internal discussions regarding the draft RNS announcement, the CFO and his friend exchanged WhatsApp messages evidencing that the friend, with the CFO’s assistance, had set up a trading account in the CFO’s name, funded by the CFO. Starting just before midday, prior to the RNS announcement, the friend submitted orders to buy 1,300,000 Bidstack shares for a total consideration of £23,925. The RNS announcement relating to the deal was published at 14:00 that day, following which the CFO received messages from a colleague informing him that Bidstack’s share price had increased significantly. During a meeting that afternoon, the CFO took screenshots of the trading account showing the profit made. In the following days, the CFO visited a number of webpages relating to insider dealing, including an FCA Final Notice. In the period from September 2022 to March 2023, the CFO’s friend sold over 99 percent of the Bidstack shares purchased, realising a profit of just over £9,000. Whilst neither of the individuals admitted to committing any offences, and exercised their right not to answer questions from FCA investigators, the FCA concluded that the CFO was in possession of inside information on 9 December 2021 and that he used that inside information to purchase the Bidstack shares in breach of UK MAR. The FCA also concluded that there was significant circumstantial evidence of them agreeing to jointly engage in insider dealing and of the CFO unlawfully disclosing inside information to his friend. |
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