Six arrested over insider dealing

[Jan Klimkowski]

Seventh arrest in FSA insider dealing crackdown

Another City professional arrested in London
FSA could still be months away from bringing charges

A seventh man was arrested today as the Financial Services Authority (FSA) continued its attempt to smash "a sophisticated and long-running insider dealing ring". The arrest of a City professional in London came as six other men began to be released on police bail after questioning following their arrest on Tuesday – in what the FSA described as its largest ever operation against insider dealing.

The FSA could still be months away from bringing charges against the seven men whom it suspects of passing inside information to traders – either directly or via middlemen – who then traded on this information to make profits. Insider dealing takes place when individuals trade on information that is not widely known in the market, for instance about takeover bids that are yet to be made pubic.

The authorities have not formally named any of the individuals involved but their identities have begun to emerge. They are Julian Rifat, a trader at hedge fund Moore Capital; Martyn Dodgson, a managing director in the corporate broking arm of Deutsche Bank; Graeme Shelley, a trader at stockbroker Novum Securities; Clive Roberts, head of European sales trading at Exane, a stockbroking joint venture with French bank BNP Paribas; and Iraj Parvizi, a director of fund Aria Capital.

The FSA, which has warned the City to "be afraid" of its crackdown on dirty dealing, raided 16 premises with the help of 143 of its own employees and officers from the Serious Organised Crime Agency (Soca) on Tuesday. It is the first time the City regulator had worked with Soca. The move was seen by the City as an attempt by the FSA to show determination in eradicating insider dealing, which has been traditionally difficult to prosecute.

The FSA, which has only secured five sentences of imprisonment for insider dealing, said the raids this week were part of an investigation that had begun in late 2007. The organisation was reluctant to release fresh information but, announcing the arrest of the seventh man, said: "Following questioning, the individuals will be released on bail."

http://www.guardian.co.uk/business/2010/...-crackdown