Three Bank Employees Said Arrested in Insider-Trading Probe
Updated on
- Identities of the bank workers haven’t been disclosed
- FCA working with NCA in case that may be bigger than Tabernula
Three
employees from major banks have been arrested in an insider-trading
investigation that could become the U.K.’s biggest case related to the
crime, according to two people with knowledge of the situation.
The U.K. Financial Conduct Authority is working with the National Crime Agency, which is assisting with covert surveillance, the people said, who didn’t want to be identified because the investigation is private. The arrests of the workers, whose identities haven’t been disclosed, were carried out in recent months and more are planned, according to the people.
An insider-trading probe was made public last week in a report by the government on the so-called Panama Papers scandal. The briefing said that a task force, set up to investigate leaked documents from a Panama law firm, had "identified a number of leads relevant to a major insider-trading operation” led by the FCA and supported by the NCA.
Officials at the regulator declined to comment and a spokesman for the crime agency declined to immediately comment.
News of the arrests comes six months after the FCA concluded a major trial in an insider-trading case dubbed Operation Tabernula. Two men were convicted by a jury earlier this year, with a record 4 1/2 year sentence handed to ex-Deutsche Bank AG corporate broker Martyn Dodgson. Three other individuals pleaded guilty in the case and another suspect is yet to be tried.
In 2008, the Financial Services Authority -- the FCA’s predecessor -- arrested eight people for insider dealing using information from print room employees at UBS Group AG and JPMorgan Chase & Co. in a probe known as Operation Saturn. Six of the men were convicted four years later with another found guilty by a jury in 2013.
The U.K. Financial Conduct Authority is working with the National Crime Agency, which is assisting with covert surveillance, the people said, who didn’t want to be identified because the investigation is private. The arrests of the workers, whose identities haven’t been disclosed, were carried out in recent months and more are planned, according to the people.
An insider-trading probe was made public last week in a report by the government on the so-called Panama Papers scandal. The briefing said that a task force, set up to investigate leaked documents from a Panama law firm, had "identified a number of leads relevant to a major insider-trading operation” led by the FCA and supported by the NCA.
Officials at the regulator declined to comment and a spokesman for the crime agency declined to immediately comment.
News of the arrests comes six months after the FCA concluded a major trial in an insider-trading case dubbed Operation Tabernula. Two men were convicted by a jury earlier this year, with a record 4 1/2 year sentence handed to ex-Deutsche Bank AG corporate broker Martyn Dodgson. Three other individuals pleaded guilty in the case and another suspect is yet to be tried.
Operation Saturn
The regulator’s investigations haven’t been limited to high-profile bankers.In 2008, the Financial Services Authority -- the FCA’s predecessor -- arrested eight people for insider dealing using information from print room employees at UBS Group AG and JPMorgan Chase & Co. in a probe known as Operation Saturn. Six of the men were convicted four years later with another found guilty by a jury in 2013.
The
partnership between the FCA and NCA is similar to the one that played
out in Tabernula. The regulator recruited the NCA’s predecessor, the
Serious Organised Crime Agency, in 2008 to carry out covert surveillance
on some of its targets, the first time the U.K. watchdog had ever used
such techniques. A conversation between two of the defendants from a bug
placed in one of their offices was heavily relied on at trial.The
FCA has cracked-down on insider trading since 2008, prior to which the
regulator had never prosecuted anyone for the offense -- opting instead
to file civil complaints. Since then, the regulator has racked-up 31
convictions related to the crime, including a number of individuals from
high-profile institutions such as Moore Capital Management LLC and Schroders Plc.
The regulator had another big win last week with Mark Lyttleton, a former BlackRock Inc. portfolio manager, pleading guilty to improperly trading shares and call options ahead of public announcements. He will be sentenced in December.
The regulator had another big win last week with Mark Lyttleton, a former BlackRock Inc. portfolio manager, pleading guilty to improperly trading shares and call options ahead of public announcements. He will be sentenced in December.
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