A top Falkland Islands politician and his shipping firm were today fined nearly £150,000 for insider trading in a rare moment of success for City watchdog the Financial Services Authority in its fight against market abuse.

Lewis Clifton, who was awarded an OBE in 2002 for services to the Falklands, was fined £59,500 for dealing in the shares of AIM-listed oil explorer Desire Petroleum, where he was a non-executive director and founder.

Falklands shipping firm Byron Holdings, where Clifton is a director and one-third shareholder, was also fined £86,030 after buying shares in Desire on inside information provided by the disgraced 52-year-old. Incredibly, however, Clifton and Byron did not make any money from the trades as they did not sell the shares even though they nearly quadrupled in price.

Clifton bought 440,000 shares in Desire for £118,570 through Byron between 19 November 2007 and 8 February 2008 — even though he knew Desire was on the verge of signing a major drilling contract. The shares, bought for less than 30p, rocketed when the contract was announced on 25 February, peaking at 107p in May.

A sale then would have yielded £470,800, giving Clifton a profit of more than £350,000. However, he kept hold of the shares and has since seen them crash back to below 30p. They were unchanged at 26p today, making his entire holding of more than 1.6 million shares worth nearly £420,000.

Clifton said his actions were “not deliberate” and added: “I regret I failed to apprise myself fully of the dealing restrictions applying to a director in my position and I accept my conduct fell short of the standard to be expected of a director of an AIM-listed company.”

Margaret Cole, FSA director of enforcement, said: “Mr Clifton held a position of trust as a non-executive director of Desire. Senior people at publicly-quoted companies should ensure they understand when material is inside information and do not trade when they have it.

“If they fail to do this they can expect the FSA to impose substantial financial or other sanctions.”

Clifton, a former representative for the Falklands in London and now Speaker of the Legislative Council, today stood down from his Desire post.