* Market abuse fine lifted by 20,000 pounds by tribunal
* Claim of financial hardship dismissed
* FSA - hardship claims will fail if assets "frittered away"
By Kirstin Ridley
LONDON, Oct 20 (Reuters) - Britain's Financial Services Authority (FSA) has secured a tougher fine on a private investor who claimed financial hardship after being caught using inside information to trade in the shares of an oil and gas company.
The FSA -- keen to keep up the pressure on market abuse since losing a case against two lawyers and a finance director in June -- said an extra 20,000 pound fine would be re-imposed on Andre Jean Scerri. This raises his penalty to over 66,000 pounds ($103,800) after a three-and-a-half year legal battle.
Wednesday's tribunal decision comes at a welcome time for the FSA, which is set to fight some of high-profile insider dealing cases in court next year as part of a quest to clean up London and prove its mettle as a prosecutor.
Authorities say Scerri, who had protested his innocence and appealed against the original fine, got wind in May 2007 that Amerisur Resources, formerly known as Chaco Resources, was poised to issue new stock at a discount to its market price.
Scerri cancelled an order he had already placed for more shares and started selling his position. He then bought most of the stock back at a discounted price after the placing.
The FSA had originally decided against imposing an extra 20,000 pounds on Scerri for engaging in market abuse and limited the penalty to the profits made through the use of inside information -- because Scerri claimed he faced serious hardship.
But in evidence presented to the Financial Services and Markets Tribunal, an independent judicial body, the FSA subsequently said Scerri had provided misleading information and had continued to invest and lose substantial funds in later trades. That claim was upheld by the tribunal on Wednesday.
"The tribunal's decision to impose a financial penalty on Scerri, in addition to the disgorgement, serves as a reminder to all that financial hardship claims will not succeed where assets have been frittered away," said Margaret Cole, the managing director of the FSA's enforcement division.
"Scerri's financial position was entirely of his own making and we welcome the tribunal's decision to reinstate the fine."
Scerri's lawyers were not immediately available for comment.
The Amerisur placing was a leaky affair. FSA fined two other private investors, Stewart McKegg and Brian Valentine Taylor, thousands of pounds in 2008 for selling some or all of their stakes before rebuilding their positions after the deal.
Mark Lockwood, a former trading desk manager at a retail stockbroking firm, was also fined in 2009 for "failing to observe proper standards of market conduct". He failed to identify and act on a suspicious client order.
Scerri has 14 days to appeal. ($1=.6360 Pound) (Reporting by Kirstin Ridley; Editing by Michael Shields)