City Traders: Eight Arrested in London in FSA Insider Dealing Probe

Tuesday’s announcement that it had arrested eight people and raided premises throughout London and the south-east of England comes less than a week after the FSA charged Malcolm Calvert, a veteran former Cazenove partner, with a dozen counts of insider dealing between 2003 and 2005.

City of London police and 40 FSA officials executed the raids in what was described in a brief statement as “a major ongoing investigation into insider dealing rings”.

It is understood that the regulator suspects the ring traded on price-sensitive information contained in deal announcements that were being produced at bank printing facilities, but not yet made public.

Bankers said that the FSA’s high-profile crackdown was triggering widespread alarm in the City, where criminal prosecutions are seen as a new threat.

Since it was given the power to bring criminal charges in 2001, the regulator has launched only three cases, all of which have been filed this year.