FCA Secures Criminal Conviction in Insider Trading Case: A Tougher Stance on Market Abuse in the UK

The FCA’s landmark win against Mohammed Zina

The Financial Conduct Authority (FCA) secured a criminal conviction against Mohammed Zina, a former Goldman Sachs analyst, for insider trading, marking a significant milestone in the regulator’s mission to combat market abuse in the United Kingdom.

Trial and accusations

Zina, 35, was found guilty of six counts of insider dealing and three counts of fraud following a 12-week trial at Southwark Crown Court. The FCA accused Zina of utilizing confidential information concerning potential mergers and acquisitions his firm was advising on to inform his trades in six companies, potentially profiting around £140,000.

The FCA’s perspective: combating economic crimes

Joint executive director of enforcement and market oversight at the FCA, Steve Smart, commented on the importance of this conviction:

“Mohammed Zina attempted to deceive the market for his personal gain by manipulatively trading on inside information. This conviction sends a strong message that economic crimes are a priority for the FCA, and we will persistently work to maintain the honesty of UK markets.”

Complexity of market abuse cases

Anthony Harrison, a market abuse specialist at Pinsent Masons, recognized the intricacy of market abuse cases, specifically insider trading cases:

“Cases of market abuse, specifically insider trading, can be intricate in nature. In criminal proceedings, it is crucial to prove specific intent elements to secure a conviction – this is a challenging task.”

FCA’s intentions: addressing market abuse in all arenas

Harrison further emphasized the FCA’s resolve to tackle market abuse in both criminal and regulatory realms:

“The FCA’s pursuit of this particular case highlights their resolve to tackle market abuse in all arenas, both criminal and regulatory. The Market Abuse Regulation, in particular, requires a lower burden and standard of proof.”

Internal controls and diligence for companies and firms

Zina’s case centered around the breach of trust within an individual. However, Harrison reminded companies and firms subject to the market abuse regime to maintain diligence regarding their internal surveillance systems and other controls, as the FCA may scrutinize broader systems and internal governance.