The Financial Services Authority (FSA) has fined a former IT technician at The Body Shop, the ethical beauty retailer, for market abuse in a rare victory for the regulator over dealing on inside information.

John Shevlin was fined £85,000 after the FSA discovered he gained inside knowlege by snooping on confidential e-mails between executives.

Mr Shevlin had borrowed more than his annual salary to bet that The Body Shop's share price would fall, having obtained a sneek preview of an unexpectedly bleak Christmas trading update from the beauty retailer.

As an IT technician, it is likely that Mr Shevlin had privileged access to executive passwords, enabling him to access their computers without their knowledge, a spokeswoman for the FSA said.

Mr Shevlin borrowed £29,000 on January 10, 2006 to pursue the controversial City trading practice known as short-selling, selling 80,000 shares in The Body Shop he did not own in the hope of buying them back more cheaply at a later date.

The FSA said he built up a total underlying exposure to the Body Shop's share price through contracts for difference (CFDs) of £213,536.

He made a profit of £38,472 by closing out his position a day later, once the disappointing trading update had been circulated to the wider market and Body Shop shares had fallen.

Margaret Cole, director of enforcement at the FSA, said: "Mr Shevlin deliberately set out to obtain highly sensitive and valuable information to which he was not entitled.

"He abused the trust placed in him by his employers and misused his technical skills to gain a financial advantage over other market users."

Although the FSA admitted that it had failed to establish that John Shevlin was guilty of insider dealing, it said that information emerged in the later stages of its investigation that provided compelling evidence.

Last October, Ms Cole unveiled a crackdown on market abuse, stating that the regulator would pursue more criminal convictions.

It also comes as the FSA clamps down on dealers that indulge in market abuse by creating false rumours about a company and then taking a short position in the shares.

Mr Shevlin no longer works for The Body Shop. He denied his involvement throughout the process. His solicitor was not immediately available for comment.

The FSA said it, as a result of his non-admission, it had not reduced his fine.

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