FCA failing to clamp down on insider trading

The Financial Conduct Authority (FCA) has prosecuted only eight cases of insider trading in the past five years. By contrast, more than 10,000 were successfully sanctioned for benefits offences in the last year alone by the Department for Work and Pensions (DWP).

Research carried out by The Times newspaper suggests that these statistics are by no means reflective of the true state of the industry.

The Times reports that over the last two years share prices fell on the day before a major profit warning in 67% of cases. In the same period, share prices increased on the day before a major takeover announcement in 70% of cases. FCA statistics indicate ‘abnormal’ share price movements occurring in the two days before the announcement of 18% of takeovers in the last year.

These statistics have been interpreted in some quarters to suggest traders are acting on prior notice.

The FCA is likely to increase its focus on such activity following these findings. We can provide advisory services in respect of the regulatory obligations of both individuals and organisations as well as specialist representation to those facing regulatory investigations.

Read the article in The Times here:

City traders getting away with abuse of markets

White-collar criminals are acting with impunity, with fewer than ten prosecutions for insider trading in the past five years.

For more information or guidance, please contact:

Anil Rajani
Partner
T. 020 7227 6745
E. anil.rajani@rlb-law.com

Oliver Haddock
Solicitor
T. 020 7227 7433
E. oliver.haddock@rlb-law.com


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.