Call Transcripts

Sean Pignatelli, a London-based equity salesman, was yesterday fined $38,000 by UK regulator The Financial Services Authority in its latest attempt to crack down on breaches of its principles - even though he was not passing on inside information to his clients. The following is a transcript of the former Credit Suisse First Boston (Europe) trader's conversations with two out of four clients who sold or short sold Boston Scientific shares on the evening of May 24 2006.

At 6.40pm:

Mr Pignatelli: "Yeah, hi."

Client: "Hi there."

Mr Pignatelli: "I know you don't like short, but umm, I have got a good heads up from an analyst on Boston Scientific BSX."

Client: "Yes."

Mr Pignatelli: "They have got an analyst meeting tomorrow. This guy is in France at the moment, apparently, and he has just met him in Paris and he told him that erm, this is the CEO, who told him clearly that they are going to lower guidance, not by a huge amount, but probably about 7 cents in the meeting because of R&D."

Client: "When is the meeting, tomorrow?"

Mr Pignatelli: "Tomorrow. I think it goes down a little bit, not a lot, but a little bit."

Client: "OK, but I don't hold the shares; it's not a problem."

Mr Pignatelli: "What? Don't know."

[Both laugh]

Client: "What is the price?"

Mr Pignatelli: "Umm, it is 30 and three quarters."

Client: "And there is big volume or small volume?"

Mr Pignatelli: "Oh yes, 3 million."

Client: "OK, sell 25 thousand . . . "

Mr Pignatelli: "OK, cheers."

Client: "At your discretion."

Mr Pignatelli: "OK, cheers."

Client: "Thanks, bye."

At 6.42pm:

Mr Pignatelli: "Hi man, it's Sean . . .Hi, quick one; I just got an e-mail from an analyst who has just come through town and he is in Paris at the moment and he has just sat down with the CEO of Boston Sci, who has clearly just told him they are about to lower guidance at [laughs] tomorrow's meeting."

Client: "Oh really?"

Mr Pignatelli: "So he told us not to go out with this."

Client: "Ah."

Mr Pignatelli: [Laughs] "That's an invitation, umm, well, you know, he said just keep it a little quiet, but err . . . umm . . . "

Client: "Good Lord!"

Mr Pignatelli: "Yeah."

Client: "So people seem to be buying sort of into this meeting, huh."

Mr Pignatelli: "Yes, well, he has just sat down with Tobin here in Paris. This is from his Blackberry, just got it. Sounds like they are going to bring down 05 guidance to 198-202 range. It is currently 206, so it's not a huge amount but you know it's seven cents. They are going to talk about DES urr umm umm share back up at 58-59 per cent, whatever that means, but spend, which is mostly R&D, is going to go up since they make, made four acquisitions this year, three of which with urr urr cash burn so . . ."

Client: "OK."

Mr Pignatelli: "I got to assume given that stock's sort of moved a little bit into, had a nice, nice-ish day, I can't see that being good news." [Laughs]

Client: "No . . . "

Mr Pignatelli: "I'll leave you with that. Cheers man."

Client: "Thanks."

Mr Pignatelli: "Bye."

Sources: The Financial Times, The Financial Services Authority

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