Auditor fined for insider trading

A FORMER accountant at PricewaterhouseCoopers, has become the first auditor to be found guilty of insider trading under the Financial Services and Markets Act.

Arif Mohammed, was fined £10,000 for profiting on share dealings in client Delta, based on his knowledge that it intended to sell its electrical division.

Mohammed became aware of this confidential information because the division was an audit client of PwC and he worked on the company's audit.

Mohammed first became aware of the proposed sale of Delta's electrical division. in July 2002. At the end of November, when the sale was close to agreement, he bought 15,000 Delta shares at 80p each, which he later sold at 105p each, making a profit of £3,750.

David Mayhew, acting director of enforcement at the FSA said: 'Mr Mohammed, as an auditor, knew he should not be dealing in Delta shares. Similarly, the market would expect an auditor not to deal in shares of an audit client. To abuse his position by essentially cheating for personal gain, is a breach of trust and undermines the integrity of the market.'