JPMorgan Internal Probe Cleared Hannam of Market Abuse, He Says

Ian Hannam, formerly one of JPMorgan Chase & Co.’s top merger advisers, said the bank cleared him in an internal investigation before the U.K. finance regulator fined him for disclosing inside information.

“JPMorgan believed that I had not done market abuse,” Hannam testified at a London court today, where he is fighting the 450,000-pound ($687,000) fine. “They carried out this very serious investigation and I assure you that if they had found I had” broken any regulatory rules, “I would not have been an employee there.”

Two e-mail messages form the basis of a proposed civil market-abuse fine against Hannam by the U.K. Financial Conduct Authority, which considers the content insider information. Hannam, formerly JPMorgan’s global chairman of equity capital markets, said the notes were in the “best interest” of his client, Heritage Oil Plc, and is challenging the sanction at a court hearing at the Upper Tribunal in London that started yesterday.

Hannam, who resigned from the New York-based bank after the fine, is one of the highest-profile finance workers the regulator has targeted. Hannam was among the bankers advising Xstrata Plc before it was acquired by Glencore International Plc.

“I particularly enjoyed working for JPMorgan,” Hannam said. “I would probably still be at JPMorgan.”

Hannam, Heritage CEO Tony Buckingham and Chief Financial Officer Paul Atherton are scheduled to testify at the trial, which could last as long as two weeks.

Hannam, a former soldier, graduated from Imperial College London and London Business School, and trained at Salomon Brothers. In 1992, he joined Robert Fleming & Co., which was bought by Chase Manhattan in 2000. Four years later, he helped to set up JPMorgan’s joint venture with London-based Cazenove Group Ltd.

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