This is believed to be the largest fine ever imposed by the UK regulator on an individual and is twice the size of its previous record penalty on an individual – US$4.5 million (GBP2.8 million) fine on former broker Simon Eagle for market abuse in 2010.
The FSA has said that it will use the restitution element to reimburse the bank which overpaid Goenka that amount as a result of his market abuse.
The said bank had sold Goenka a structured product, the value of which depended on Reliance’s closing share price.
In order to avoid a loss on the product, Goenka in October 2010 had arranged for a pre-planned series of substantial and carefully timed orders to be placed in the final seconds of the LSE’s closing auction so as to push the price.
FSA acting director of enforcement and financial crime Tracey McDermott said the impact of such behaviour goes far beyond one counterparty.
"Market confidence will suffer if participants cannot be satisfied that the price of quoted securities reflects the proper interplay of supply and demand," McDermott said.