Hedge fund fined £875,000 for keeping its Premier Oil short secret

Hedge fund fined £875,000 for failing to tell regulators it was shorting Premier Oil on a huge scale

City regulators have fined a hedge fund almost £875,000 after it failed to tell the market it had built up a huge short position against Premier Oil.

ARCM neglected to tell the Financial Conduct Authority 155 times and make public disclosures 153 times, between February 2017 and July 2019, about the bets it had made against the North Sea energy company’s shares.

The Hong Kong-based fund eventually built a short position worth 16.9 per cent of Premier’s total stock. 

Fined: Hong Kong hedge fund ARCM built a short position worth 16.9 per cent of the North Sea energy company Premier Oil’s total stock

ARCM has said it had not realised it had made the breaches and reported them as soon as they were discovered.

It is the first fine over breaking short-selling rules the FCA has ever issued.

The FCA reduced ARCM’s fine by 30 per cent because it worked with the regulator during its investigation – or the charge would have been £1.2million.

Premier Oil had struggled for years before it went through a mammoth debt restructuring in 2017 following the collapse in oil prices.

It restructured again this year and last week agreed to be taken over by private equity group Chrysaor, which also works in the North Sea.

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