[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Friday, 17 March 2006, 16:51 GMT
Insider trading 'growing problem'
Share prices
Insider information makes trading shares a lot easier
Almost a third of large UK takeover deals show signs of possible insider trading, the Financial Services Authority (FSA) has warned.

The UK's financial regulator analysed takeover bids in 2000 and 2004 and said it had found unusual share price movements before about 29% of them.

Such movements "suggest some informed trading was going on", said an FSE spokesman.

The FSE added that the situation appeared to be getting worse.


"There was a small but statistically significant increase in informed price movements, suggesting a deterioration in market cleanliness," its report found.

The FSE said the perpetrators of the insider trading could include traders at hedge funds for investment banks, as well as third parties acting on tip-offs.

Its study also found signs of informed trading before 21.7% of potentially market-moving announcements by companies listed on the FTSE 350 index between 1998 and 2003.

The study researched a total of 1,500 announcements by FTSE 350 members.

Measuring exercise

Yet the FSE said it did not have the resources to think of starting prosecutions based on the research.

"Going back to something several years ago, unless outstanding in terms of behaviour, would not be the best use of our resources," said the spokesman.

"This [survey] is not about defining our work now, to generate extra classes, but to provide a measure of the scale of the issue."

The FSA is instead stepping up efforts to monitor current share price movements.

FBI arrests magazine-trade broker
24 Nov 05 |  Business
Net widens in Reebok insider case
18 Aug 05 |  Business

The BBC is not responsible for the content of external internet sites


Americas Africa Europe Middle East South Asia Asia Pacific