Former finance executive and associate receive fine for insider trading Bidstack stock

A recent case of insider dealing involving Dipesh Kerai and Bhavesh Hirani has resulted in fines totaling £108,731 by the Financial Conduct Authority, marking the fourth enforcement action against insider trading in recent months.

The incident involved Hirani passing confidential information to Kerai regarding a major deal between Bidstack Group, an advertising agency, and a large video game publisher before its official announcement. Hirani, who was serving as Bidstack’s interim chief financial officer at the time, opened an online trading account in Kerai’s name and purchased 1.3 million shares in Bidstack using £25,000 of Kerai’s money. The share price of Bidstack rose by 125 per cent when the deal was disclosed, resulting in Kerai making a profit of over £9,200 from the purchased shares with Hirani’s assistance.

As a result of their actions, Kerai was fined £52,731, which included returning the £9,200 profit he made, while Hirani was fined £56,000. Both men were investigated by the FCA, where Hirani denied disclosing insider information or encouraging share purchases based on confidential details, and Kerai denied possessing inside information provided by Hirani.

The FCA’s final notice concluded that both Hirani and Kerai had violated insider trading laws, although there was no evidence of profit-sharing or distribution between the two individuals. Both men received a 30% reduction in their fines for cooperating and resolving the matter through the FCA’s settlement procedures.

Steve Smart, the executive director of enforcement and market oversight at the FCA, highlighted that the pair had exploited inside information for personal gain, trading on details that were unavailable to other investors. Bidstack, known for its in-game advertising services, fell into administration and was subsequently liquidated the previous year.

Smart expressed gratitude towards the unidentified company that flagged the suspicious trades to the FCA, emphasizing the regulator’s commitment to taking action against those who misuse inside information and undermine trust in UK markets. This incident adds to a series of recent enforcement actions by the FCA against insider trading, demonstrating the regulator’s efforts to maintain market integrity and transparency.