Demonstrating its continuing focus on preventing, detecting and punishing market abuse, on 25^th January 2023, the FCA announced that it has commenced criminal proceedings against five individuals, alleging that they conspired to commit offences of insider dealing between December 2019 and March 2021. In addition to insider dealing, the five individuals are charged with money laundering offences.

One of the individuals was previously an analyst at asset manager Janus Henderson and the FCA alleges that he used confidential information that he accessed in this role to facilitate trading in 49 companies through accounts held by his co-conspirators, resulting in a profit of approximately £1.5 million. The FCA believes that the defendants used Contracts for Difference (CFD) in relation to each of the companies, betting that the value of shares would go down after announcements. 

The case follows a number of enforcement actions by the FCA in relation to market abuse over recent months and acts as a reminder that the FCA can raid sites where it suspects that there may be relevant evidence, with the FCA noting in its announcement that in March 2021 a multi-site search and arrest operation was conducted by it with the assistance of the Metropolitan Police. Also of note some of the alleged offending took place during the pandemic when many individuals were working remotely. The FCA identified at the time that home working arrangements, together with the migration of certain employees to alternative sites, had the potential to raise new risks in relation to the handling, and potential unlawful disclosure of inside information.

Firms need to ensure that they have robust systems and controls in this area and stay on top of FCA guidance and feedback, including Market Watch publications. In a December 2022 Dear Portfolio letter, the FCA stated that it remained concerned about the level of suspicious activity in the CFD sector and that it will consider enforcement action where it identifies firms operating materially below its minimum standards. The defendants will appear at Southwark Crown Court next month for a Plea and Case Management Hearing.