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FCA and Met Police Arrest 3 Men and 1 Woman Over Insider Dealing Investigation.

The Financial Conduct Authority (FCA) and the Metropolitan Police has arrested three men and one woman in West London in relation to an insider dealing and market abuse investigation.

The four individuals, including three men aged 29, 51, and 56 and one women aged 25, are currently in custody, in order to be questioned.

The FCA said arrests are not linked to any other ongoing insider dealing investigation and no further details can be confirmed at this time. The added that no individuals have been charged.

Insider dealing is a criminal offence that is punishable by a fine or up to 7 years imprisonment. In the UK, a person maybe guilty of insider dealing if they have inside information from an inside source and he trades in the relevant securities.

The difference between insider dealing and the US' insider trading is to do with regulator's ability to prove wrong-doing.

In the US, the Department of Justice must prove that the suspect traded in breach of a fiduciary duty or a duty of trust or confidence owed either to the company shareholders or to the source of the inside information.

In the UK, the FCA must only prove that the person had the information directly or indirectly from a company officer, employee or shareholder or from someone who has access to it by virtue of his employment.

FCA Cracks Down on Individuals

The FCA has promised to be a regulator 'with teeth' after it took over from the Financial Services Authority (FSA) on 1 April this year.

Previous to the FCA's establishment, the FSA secured 23 convictions in relation to insider dealing, including that of (http://www.fsa.gov.uk/vgn-ext-templating/v/index.jsp?vgnextoid=df88ba016154d310VgnVCM10000044bc10acRCRD&vgnextfmt=default) Paul Milsom on 7 March 2013 and Richard Joseph on the 11 March 2013.

As of June this year, the (http://www.ibtimes.co.uk/articles/489583/20130712/fca-fines-libor-fixing.htm) FCA only issued a little over [pounds sterling]10m in fines as the regulator focuses on punishing individuals and cracking down on consumer issues .

However, there could be a raft of bumper fines one the horizon as group has recently announced that it will (http://www.ibtimes.co.uk/articles/487920/20130709/fca-martin-wheatley-fsa-mis-selling-ppi.htm) launch a number of investigations into add-on insurance as well as (http://www.ibtimes.co.uk/articles/485466/20130702/payday-loan-lender-fca-oft-pac-wonga.htm) payday loan companies .

According to data calculated by Wolters Kluwer Financial Services, the small amount of fines over the past two months is a result of FCA getting (http://www.ibtimes.co.uk/articles/458235/20130417/fsa-fca-land-banking-criminal-offence-civil.htm) tough on individuals and (http://www.ibtimes.co.uk/articles/485466/20130702/payday-loan-lender-fca-oft-pac-wonga.htm) consumer concerns.

"The concentration of fines so far since the FCA came in to being is very much weighing heavy on consumer concern which of course was to be expected as the FCA is concerned with conduct as opposed to prudential matters," said Mary Stevens, Manager - Regulatory Analysis Europe at Wolters Kluwer Financial Services.

However, the (http://www.ibtimes.co.uk/articles/493267/20130722/high-frequency-trading-fca-fine-michael-coscia.htm) FCA has since dished out their first ever fine for foul play in high-frequency trading as well as issuing a raft of charges over (http://www.ibtimes.co.uk/articles/481682/20130621/fca-illegal-land-banking-st-clair-estates.htm) individuals investigated for land banking offences .

It has also fined the (http://www.ibtimes.co.uk/articles/494184/20130724/rbs-fine-transaction-reporting-fca-barclays.htm) Royal Bank of Scotland [pounds sterling]5.6m for failing to adequately report on millions of financial transactions it made in the wholesale markets .
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Publication:International Business Times - US ed.
Geographic Code:4EUUK
Date:Jul 31, 2013
Words:589
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