Largest FSA Investigation Leads to Four Insider Trading Charges
Four men have been charged with insider trading as a result of one of the largest and most complex investigations in the crackdown against malpractice in the financial world– Operation Tabernula, a cooperative effort between the Financial Services Authority (FSA) and the Serious Organised Crime Agency.
The conspiracy in question spanned between 1 November 2006 and 23 March 2010 and according to the FSA it includes Martyn Dodgson, senior corporate broker at Deutsche Bank; Iraj Parvizi, an Iranian-born businessman and investor in small-cap stocks; Ben Anderson, a private stock broker; and Andrew Hind – an accountant. Based on evidence gathered by the FSA, the four men have made a profit of £3 million from their trading on inside information.
!m[](/uploads/story/506/thumbs/pic1_inline.png)Mr Parvizi’s lawyer Peter Hughmans was quoted by the Guardian to have said that his client “emphatically denies the charges and is determined to clear his name”. Solicitors for Mr Dodgson declined to comment and the newspaper could not get in touch with the legal representatives of the other two involved.
Mr Dodgson, who has been a Treasury adviser and a part of the Deutsche Bank team which consulted the government on its stakes in Lloyds Banking Group and Royal Bank of Scotland, was been suspended by his bank immediately after the FSA raided his workplace back in March 2010. Deutsche Bank reiterated on a couple of occasions that the investigation “concerned one individual, Martyn Dodgson, and not the bank itself” and that the bank has “co-operated fully with the authorities”.
Mr Hind, apart from being an accountant, has served as director of a number of firms including Deskspace Offices, Jacob & Co UK, Whitdale Ltd and Stock Options Ltd, where he was a stockholder as well.
A total of nine people have been arrested and interrogated as part of Operation Tabernula, which has been examining an insider trading ring said to have made up to £22 million. Two years ago the authorities raided 16 addresses in London and the south-east, all homes or offices of people working for Deutsche Bank, BNP Paribas, Moore Capital and Novum Securities.
Currently the FSA, which will be replaced by the Financial Conduct Authority and Prudential Regulation Authority in 2013, is investigating four other individuals for insider dealing. The regulator admitted in 2008 that its light touch approach to policing the Square Mile has not been fruitful and since 2009 has made 14 convictions in relation to insider dealing.
US authorities have also been battling with a number of cases of insider trading. Billionaire Steven A. Cohen and his hedge fund SAC Capital Advisors are once again in the spotlight after a former technology industry analyst of the company pleaded guilty to insider trading. The fund itself and his owner are not under investigation but according to Reuters the latest case could cause some discomfort for some of the fund’s wealthy patrons. “There is a feeling that the Feds’ web around Cohen might be slowly tightening and that is bound to get people to think about what to do with their money,” Reuters quoted one industry investor familiar with Cohen’s fund but who asked not to be named.
