Seven people have been charged in a British insider trading case related to activities at the London printers for Swiss bank UBS AG and UK brokerage Cazenove .
Almost two years after arrests in connection with suspected insider dealing rings, the Financial Services Authority (FSA) regulator said today it has charged seven people.
The FSA, which has been hitting the headlines after a series of swoops on market abuse, said it has made 13 charges in respect of conspiracy to deal on inside information obtained by the defendants from two major investment banks that it did not name.
One of the seven, Mitesh Shah, has also been charged with placing spread bets to launder proceeds and a warrant for the arrest of an unnamed eighth person has been issued, the FSA said in a statement.
"The charges are based on allegations that cover a two-year period and involve alleged unlawful profits of about £2.5 million," the FSA said.
The FSA named the other six charged as Ali Mustafa, Pardip Saini, Paresh Shah, Neten Shah, Bijal Shah and Truptesh Patel.
The charges relate to trading in the shares of Misys, Morgan Crucible, Laidlaw International, Reuters Group, Biffa, Abbot Group, Premier Oil, Vega Group, GCap Media, Fiberweb, Enodis and Thus Group.
"The defendants have been bailed to appear at City of Westminster Magistrate's Court 14 April," it added.
The 21-month probe involved 35 investigators, lawyers and other staff poring over 200,000 electronic files, 130 individual trading accounts, 75 electronic devices and taking over 250 witness statements, the regulator said.
Earlier, Michael Potts, a lawyer with Byrne & Partners, said his client Paresh Shah had already been charged and seven other charges would follow in an investigation that has been codenamed "Saturn". He declined to divulge how Paresh would be pleading.
The charges come one week after the FSA stunned the financial industry by sending a squad of 143 officers with police to arrest seven in a separate sting operation that ensnared names such as Paribas's partly-owned Exane unit, US hedge fund giant Moore Capital and Deutsche Bank.
The FSA has been keen to silence critics who say it is unable to haul in big-hitters in its attempts to stamp out insider trading in London.
"Today's charges, plus the raids announced last week, are a signalling of intent by the FSA that it plans to make use of its criminal powers and intends to use them not only in relation to cases of isolated insider dealing -- but will try to do so to target what they believe to be widespread insider dealing rings in the city," said another London lawyer.
Industry sources have said the suspects charged today include a sub-contractor at Cazenove, now owned by US investment bank JPMorgan Chase and a junior employee at UBS AG.
The FSA, which is increasingly keen to use its criminal powers to pursue market abuse, has jailed five people since 2009 -- although one person received a suspended sentence -- and is prosecuting three other cases.
Reuters