UK Cracks Down On Insider Dealing
Monday, March 29, 2010
The UK Financial Services Authority (FSA) has confirmed that several
City of London finance professionals have been arrested in what is turning
out to be the UK's largest ever crack down on insider dealing.
In the first operation carried out jointly between the FSA and the
Serious Organised Crime Agency (SOCA), 17 addresses have been searched
in London, the South East and Oxfordshire. Documents and computers have
been seized from residential and business premises, and the FSA
confirmed that seven men, including two senior city professionals at
leading city institutions and one city professional at a hedge fund,
have been arrested on suspicion of being involved in "a sophisticated
and long-running insider dealing ring"
It is believed that the city professionals passed inside information
to traders, either directly or via middlemen, who traded based on this
information and have made significant profits as a result.
The operation was carried out by 143 FSA personnel together with
officers from SOCA as part of a joint investigation that commenced in
late 2007.
The arrests, made on March 23 and 24, come a week after Christian
Littlewood, a former banker at Dresdner Kleinwort and Shore Capital,
was charged along with his wife on 14 counts of insider trading.
Earlier this month, Malcolm Calvert, a former partner at Cazenove was
sentenced to 21 months in jail after being found guilty of insider
trading.
The FSA has been keen to crack down on insider trading, but charges
are often hard to make stick when they come before a court.
According to the FSA's 2008-09 annual report, almost 30% of
corporate announcements were preceded by abnormal movements in
company share prices.
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