Published: 1st April 2010

It will not have escaped your attention that FSA and SOCA have carried out a joint operation involving address searches and arrests in a clampdown on insider dealing; firms such as Exane, Novum, Deutsche Bank and Moore Capital have been named.

Although not official policy, in the real world it is likely that individuals taking advantage of inside knowledge will always be with us (shoplifting is a criminal offence; stores have camera surveillance and security staff and yet ‘shrinkage’ in the UK stands at around £4.9bn here).

Despite this, and given that market abuse features high on the FSA agenda (e.g. it is referenced in the FSA’s Financial Risk Outlook and Business Plan), we suggest that firms give consideration to reviewing their current market abuse procedures and policies. Even if it is felt that these are already adequate, a review would demonstrate to the regulator that the firm is proactive in the area of market abuse.

The press release is very useful for those responsible for market abuse training within firms. The editor’s notes contain in one place access to all the FSA insider dealing prosecutions/pending prosecution cases, the details of which can be used in training sessions as ‘real life case examples’.

Further to this, the FSA charged seven more individuals with 13 charges in respect of conspiracy to deal on inside information obtained by the defendants from two major investment banks.

One defendant has additionally been charged with an offence in relation to money laundering. A warrant for the arrest of another person in connection with this investigation has been issued. The charges are based on allegations that cover a two-year-period and involve alleged unlawful profits of about £2.5 million.

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