All posts in the FSA regulation category

Insider dealing v insider trading

This month the headline grabbing case for the FSA was that of Ian Hannam, the former banker at JP Morgan, who was fined £450,000 for relaying inside information about his client Heritage Oil to a prospective client in 2008. Hannam’s case is one of several, including David Einhorn and Nicholas Kyprios, which over the course of the last few months alone have been publically paraded by the FSA in order to demonstrate their stringent enforcement policy. Whilst those who work in the finance and banking sector can be left in little doubt that the FSA will vigorously pursue individuals who they believe may have engaged in market abuse or insider dealing, the threat in reality is that of a civil penalty rather than a criminal sanction.

Although the FSA has undoubtedly stepped up several gears in respect of its criminal prosecution of insider dealing, this increased effort has yet to be rewarded with the level of convictions that are being enjoyed by prosecutors in the US. Since 2009 the US Attorney’s Offices in New York alone have prosecuted 66 people for insider trading and have obtained 57 convictions and guilty pleas. In contrast, as of February 2012, the FSA had secured only 11 convictions.

More tough action from the FSA – time to stop playing games

Nicholas Kyprios, European head of credit sales at Credit Suisse, has been fined £210,000 by the Financial Services Authority for misuse of information being treated as insider information.

Credit Suisse was acting on behalf of Liberty, an American telecoms company targeting the acquisition of Unitymedia, a German television company. In preparation for the deal, Mr Kyprios was wall-crossed with regard to a proposed £2.5 billion bond issue by Unitymedia. He was instructed that this was inside information, which he should not share with anyone outside of Credit Suisse except for five pre-approved investors who he was also permitted to wall-cross.

FSA restructuring – what implications for financial crime prosecutions?

On 15 February 2012, the Financial Services Authority (FSA) announced that the managing director of its conduct business unit, Margaret Cole, will leave the financial regulator at the end of March. Her exit follows a number of departures of senior staff from the FSA as the coalition government continues to implement its policy to restructure the way in which the financial industry in the UK is regulated. So what is the shape of things to come?