Winterflood Securities, the market-making arm of Close Brothers, today lost its appeal against a £4 million fine imposed on it by the Financial Services Authority for its role in a share-ramping scheme.

The Financial Services and Markets Tribunal upheld the fine, the largest imposed on a City firm for market abuse. It also upheld fines of £200,000 and £50,000 on Winterflood traders Steven Sotiriou and Jason Robins. All three are seeking permission to take their case to the Court of Appeal.

This is the latest victory in the FSA's active campaign against market abuse, although it has taken six years.

It also emerged today that the FSA has fined or otherwise punished Simon Eagle, who led the share ramping, another individual and another City firm, all of whom have taken their cases to the tribunal.

The FSA outlined further details of the share-ramping operation in 2003.

Eagle, a former commodities trader, wanted to take control of an AIM shell company. He identified an obscure little-traded company Fundamental-E Investments and agreed with its two majority shareholders to buy their 85% stake. But he only planned to take a 10% stake himself and bought a stockbroker, SP Bell, beginning a game of pass the parcel using its clients to buy the rest of the FEI shares.

These stakes were rolled over from one client to another to avoid them ever having to stump up the cash. This worked so long as FEI's share price continued rising and Eagle ensured that by buying shares from Winterflood “regardless of market conditions”.

FEI shares rose fivefold between May 2003 and July 2004. But on 15 July the share price crashed from 11.75p to 7.5p. The Stock Exchange received information that SP Bell had substantial unsettled positions in FEI, whose shares were suspended. That crystallised the losses at SP Bell, which went bust with debts of more than £9 million.

During the ramping process FEI was Winterflood's most profitable stock. It made more than £1.1 million from the shares.