The City watchdog has fined the chief executive of a Turkish oil company a record sum for insider trading

in the shares

Mehmet Sepil, the boss of Genel Enerji, was ordered by the Financial Services Authority (FSA) to pay £967,005. The regulator also fined Genel's chief commercial officer, Murat Ozgul, and its exploration manager, Levent Akca, £105,240 and £94,062, respectively.

The largest fine previously handed down by the FSA was £750,000 in 2006 when Philippe Jabre, a former trader at the hedge fund GLG, was punished for market abuse and violating market conduct. The penalties levied on the Genel Enerji executives, which include the repayment of profits on the transactions, relate to a joint venture that the company and Heritage entered into in March last year to explore the Miran oil field in Kurdistan.

Sepil, Ozgul and Akca were privy to detailed daily from reports from Heritage about the drilling tests conducted at Miran between 17 April and 3 May. It was known that Heritage, which trades on the London Stock Exchange

, was testing there but the results were "confidential and highly sensitive", the FSA said in its adjudication yesterday.

On 4 May, the three men flew to London for a series of high-level meetings where the "positive" test results were discussed. Wasting no time, the trio contacted their brokers and purchased shares in Canada-based Heritage the following day.

On 6 May, Heritage announced the results of the Miran exploration as a "major oil discovery" with between 2.3 and 4.2 billion barrels of oil in place, and the company's share price surged by about 25 per cent. Later that day, the three Genel executives sold all their Heritage stock at a big profit.

Margaret Cole, the FSA's director of enforcement, said: "The penalties the FSA has imposed as a result of this investigation send a clear message to companies and individuals, wherever they are based, that dealing with the benefit of inside information is not acceptable.

"The FSA expects those entrusted with inside information not to betray that trust. We will not tolerate the abuse of a privileged position to make a personal profit at the expense of other market participants, and these penalties underline our commitment to combating this behaviour."

Last August, Sepil, Ozgul and Akca voluntarily contacted the watchdog to express their "remorse", make certain admissions about the basis of their trading and offer to surrender the profits they made from the transactions. The FSA reduced their fines by 30 per cent because they settled at an early stage, with the fines also including the profits made on the shares. The FSA said "none of the executives set out to commit market abuse" and it was not criticising the conduct of either Heritage Oil or Genel Enerji.