Schroders, a UK-based asset management company that was founded some 200 years ago and now manages $446.8 billion, has received some unwanted attention.
A UK regulator, the Financial Conduct Authority (FCA), has charged a former Schroders trader, Damian Clarke, with insider trading.
Clarke, 38, faces nine counts related to trades between Oct. 30, 2003 and Nov. 28, 2012. He was arrested in January 2013 with four other suspects, and Clarke is scheduled to appear in a London court on July 4. Schroders fired him in February 2013 for “gross misconduct.”
The charges are “related entirely to this individual’s personal actions” and “Schroders has not been subject to any investigation,” according to the firm’s statement, quoted by Bloomberg News. “There is no indication of any detrimental impact on our clients or financial results.”
“Schroders does not tolerate any behaviour that is counter to our core value of integrity,” the firm added in a statement.
The FCA dropped cases against the other four suspects. Clarke’s charges relate to trading in equities and spread bets, the report adds. He had been working for Schroders since 2000.
The Financial Times said the FCA overall has increased its enforcement of insider trading laws. Recently, the FCA dropped an insider trading case against Clive Roberts, the former head of European sales trading at Exane BNP Paribas, in May, Bloomberg said. Nine other men have been charged in Operation Tabernula, an insider-trading inquiry, Bloomberg adds. In addition, the FCA dropped an insider case against Tim Whyte and Carl Linderum, both of the former Lodestone Natural Resources firm, and against Carl Esprey of GLG Partners.
Since 2008, the FCA has gotten 24 convictions for insider trading. Those convicted on insider trading face a maximum seven-year sentence or an unlimited fine, Reuters said. In total, the FCA is currently prosecuting eight defendants in insider trading cases.
In an explanation of the UK enforcement policy, The Wall Street Journal reported, “People suspected of insider trading for many years in the U.K. faced civil action. The FCA’s drive to make increased use of criminal sanctions dates back about five years and is aimed at increasing deterrence. It was introduced by Margaret Cole, who joined the regulator as director of enforcement in July 2005.”
Under UK law, insider trading take place when “an investor attempts to execute a transaction on the basis of market-moving, non-public information they have received as part of their role,” according to a report from the International Business Times.
Meanwhile, in the United States the Securities and Exchange Commission has lost some recent cases against defendants who face claims of insider trading, InsideCounsel reported.