Financial Crime World

Title: FCA Warns UK Financial Firms of Insider Trading Threat from Organized Crime Gangs

Arrest of Three Suspects on Suspicion of Insider Dealing and Money Laundering

Three men, aged 52, 53, and 48, were arrested on suspicion of insider dealing and money laundering linked to organized crime. The arrests were made by the Financial Conduct Authority (FCA), in partnership with the UK’s National Crime Agency, following raids at three residential properties in London on 1 February. A fourth suspect, a 48-year-old man, was interviewed under caution on 13 February and remains under investigation.

FCA’s Warning: Be Vigilant Against OCG Attempts to Recruit or Compromise Junior Staff

In a statement, the FCA revealed its concern over Organized Crime Groups (OCGs) attempting to recruit or compromise junior staff members for insider trading. The FCA highlighted the heightened risk of workers being approached by criminals, particularly junior members.

FCA’s New Guidance for Companies

To prevent insider trading, the FCA offered the following guidance:

  1. Monitor trading patterns before merger and acquisition announcements. Companies should inspect any unusual activity, such as multiple clients trading in the same security for the first time.
  2. Suspicious media leaks and social media activity. Companies should investigate media leaks and social media activity, particularly from employees in merger and acquisition roles, as they could indicate criminal involvement.

The FCA’s Commitment to Combating Insider Trading

Steve Smart, joint executive director at the FCA, commented on the arrests:

“Insider dealing poses a significant threat to the integrity of financial markets both in the UK and overseas.”

Smart went on to emphasize the FCA’s commitment to combating organized crime networks involved in insider trading:

“The FCA is committed to combatting organized criminal networks involved in this threat.”

FCA’s Capabilities to Identify and Disrupt Insider Trading

Smart reiterated the FCA’s use of sophisticated monitoring systems and specialist teams to identify and disrupt insider trading activities. He asserted:

“Working with our domestic and international enforcement partners, we will continue to use all the powers and tactics available to us to disrupt this threat.”