Deutsche Bank and Moore Capital drawn into FSA swoop on 'insider dealing'Some of Europe's leading financial institutions have been drawn into London's largest insider trading investigation.
23 March 2010
Leading banks BNP Paribas, Deutsche Bank and top hedge fund Moore Capital are among those drawn into the investigation which reached its climax on Tuesday when 150 officers from The Financial Services Authority raided 16 addresses in and around London. Six men were arrested in the joint operation with officers from the Serious Organised Crime Agency.
The Daily Telegraph understands that Clive Roberts, head of European sales trading at Exane, in which BNP Paribas owns a 50pc stake, has been implicated in the investigation, along with a junior employee in Deutsche Bank's London office.
In addition reports claimed that Julian Rifat, an execution trader at Moore Capital, has also been arrested after the officers raided the fund's London office. Moore Capital said that Mr Rifat is now on administrative leave.
The raid follows an investigation lasting more than two years into what the FSA said was a "sophisticated and long-running insider dealing ring". Two of the men arrested were described as "city professionals at leading city institutions", while a third was said to be a "city professional at a hedge fund".
A spokesman for Deutsche Bank said the bank was co-operating with the investigation, but declined to give any further details. Exane declined to comment. Andrew Melrose, chief executive of the broker's UK operations, confirmed an employee had been questioned by the FSA relating to insider dealing allegations. “We are and will continue to provide assistance to the FSA during their investigation,” he added.
It is believed that all the men were trading on their personal accounts, however the high-profile arrests will prove a major embarrassment for all the firms implicated by the investigation. Documents and computers were seized by the FSA and SOCA officers from residential as well as business premise, in what marks the first joint operation launched by the two organisations.
One lawyer said: "The participation of SOCA shows a major elevation in the FSA's campaign against insider trading. SOCA's involvement could also suggest there is an international dimension to this investigation."
Two weeks ago, former Cazenove trader Malcolm Calvert was sentenced to 21 months in jail after being found guilty of five counts of insider trading. Mr Calvert's conviction, which he is appealing, was followed last week by an announcement from the FSA that Christian Littlewood, a former corporate financier at Dresdner Kleinwort and Shore Capital, had been charged along with his wife on 14 counts of insider trading. The FSA has launched proceedings to extradite a 33-year-old Singaporean man from Mayotte in the Comoros Islands in connection with Mr Littlewood's case.
Cracking down on insider trading has become one of the FSA's priorities and its recent business plan the regulator said it would be taking a more "confrontational" approach to the offence.
Margaret Cole, director of enforcement and financial crime at the FSA, has been keen to prove that the regulator is capable of gaining criminal prosecutions in insider trading cases which are notoriously hard to prove.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7507232/Deutsche-Bank-and-Moore-Capital-drawn-into-FSA-swoop-on-insider-dealing.html
Also ...
Former JPMorgan (NYSE:JPM) Cazenove Partner Malcolm Calvert ...
March 11, 2010
The conviction of Malcolm Calvert, 65, a former head of market marking at Cazenove, will be a major embarrassment for the Queen's stockbroker.
During the case, the prosecution alleged that an unnamed insider at the bank was the source of the leaks of confidential information on upcoming takeovers that Mr Calvert profited by trading on.
During the case, the prosecution alleged that an unnamed insider at the bank was the source of the leaks of confidential information on upcoming takeovers that Mr Calvert profited by trading on.
Margaret Cole, director of enforcement and financial crime at the FSA, told The Daily Telegraph that following the conviction the market should "take the FSA very seriously indeed", echoing the comments of departing FSA chief executive Hector Sants, who said last year that people should be "very afraid" of the regulator.
For the FSA the verdict marks a major victory in its quest show that it can bring successful prosecutions for a crime that has, in the past, been seen as difficult to secure convictions for.
"In the past people thought they could get away with crimes like this," said Ms Cole. "What is important is that there was a feeling in the market that it was impossible to get convictions for insider trading. We have proved that isn't right."
A jury at Southwark Crown Court took three days to find Mr Calvert guilty on five out of 12 counts of insider trading on information provided to him by a source that was said to be working at his former employer.
