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Thu, Mar 25, 2010 - Page 10 News List

Six men arrested on suspicion of insider dealing in London

INSIDERS OUTED Among the six people arrested were employees of Moore Capital, Deutsche Bank and Exane, a firm partly owned by French bank BNP Paribas


Six men have been arrested on suspicion of insider dealing after a major probe by Britain’s Financial Services Authority (FSA) watchdog.

The men included two senior professionals at well-known City of London institutions and a hedge fund professional, following the FSA’s largest operation against insider trading, the regulator said.

Among those arrested on Tuesday were employees of Deutsche Bank, hedge fund Moore Capital and financial services firm Exane, which is partly owned by French bank BNP Paribas, reports said.

Officials searched 16 homes and businesses in London and the surrounding counties, seizing computers and documents.

The six were arrested “on suspicion of being involved in a sophisticated and long-running insider dealing ring,” the FSA said. “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.”

More than 140 FSA investigators were supported by staff from the Serious Organised Crime Agency as part of a joint investigation running from late 2007.

“We are cooperating with the authorities as they look into this matter,” a Deutsche Bank spokesman said.

BNP told the Financial Times newspaper: “We confirm that an employee of the firm has been arrested. We are cooperating with the authorities.”

A Moore Capital spokesman told the Guardian newspaper: “Moore is cooperating fully with the FSA in its investigation. The individual has been placed on administrative leave pending completion of the investigation.”

It is the latest show of force by British regulators as they step up a crackdown against market abuse in the financial services powerhouse of the City of London.

The FSA announced plans last week to hire an extra 460 staff in a bid to toughen up supervision and the boss of the watchdog, Hector Sants, recently promised more action to tackle insider dealing to clean up Britain’s financial services sector.

“There is an unacceptably high level of market abuse in the UK. We need to work to reduce that,” Sants said in an interview with the Sunday Telegraph newspaper. “There’s no evidence that the UK marketplace is worse than other major financial centers, but I don’t think that should be our benchmark. Our benchmark should seek to have a market that participants really believe to be clean and fair and, as a general test, I think that if you were to ask the market participants, they would share my view that there is too much market abuse.”

Earlier this month, the FSA secured a 21-month jail term for Malcolm Calvert, a former equities market maker at stockbroker Cazenove, following his conviction for insider trading in the watchdog’s largest prosecution to date.

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