Six arrested over insider dealing

[David Guyatt]

http://www.guardian.co.uk/business/2010/...CMP=AFCYAH

Six arrested over insider dealing

City professionals are among those held after the financial watchdog carried out raids on 16 addresses in its 'largest-ever operation against insider dealing'

Jill Treanor

guardian.co.uk, Tuesday 23 March 2010 12.16 GMT

Dawn raids at 16 addresses were carried out by the City regulator this morning as it attempted to close down a "sophisticated and long-running insider dealing ring".

The first operation carried out jointly between the Financial Services Authority and the Serious Organised Crime Agency involved 143 personnel in a swoop on 16 addresses in London, the south east and Oxfordshire.

The FSA described the raids as its "largest-ever operation against insider dealing" and said that six men, including two senior City professionals at leading institutions and one City professional at a hedge fund had been arrested on suspicion of being involved in a sophisticated and long-running insider dealing ring.

They are being held at police stations in London, Kent and Oxford and are suspected of passing inside information to traders - either directly or via middlemen - who traded based on this information and have made significant profits.

Hector Sants, chief executive of the FSA, has warned the City to be "afraid" of the regulator and last week set out plans for a hiring spree to help bolster its investigations of insider dealing, a crime that is notoriously difficult to prove.



As he launched the FSA's business plan last week, Sants said this was the "key year" to demonstrate the FSA was serious on cracking down on such City crimes. There would be a "significant" increase in criminal cases and enforcement actions, he said, reiterating his view that the amount of insider dealing in the City was "unacceptable".

But, since 2008 the FSA has been focusing on this area and this is the fifth set of arrests carried out since then. Four people have been jailed - and another person received a suspended sentence - while three other insider dealing cases are set for trial.

The most recent case to result in a jail term was earlier this month after Malcolm Calvert, a former partner at the blue-blooded City firm Cazenove, was found to have used an unknown insider to get information about a number of proposed mergers between 2003 and 2005.

(my emphasis)