Insider trading is one of the city’s oldest crimes. It is rare for a takeover to occur without a surge in the target company’s stock price first.
Advisors seek to prevent leaks by using code names and meetings in secret locations, but it is impossible to fill in all the gaps.
In recent times, the ritual of “capital market days” has developed and key information is shared with major investors and analysts in the battalion.
Fraud lawsuit: FCA launches criminal action against former Janus Henderson analyst Redinel Korfuzi accused of profiting from trades at five companies
This potentially gives finance professionals a leg up on private investors. The technology means that barring deliberate deception, such as the use of cell phones, financial insiders are only too aware of how compliance officers and regulators can access communication traffic. .
The delete button can be clicked but the trace is still there on the hard drive or in the cloud.
It is relatively rare for the personnel of a major financial firm to find themselves in the face of hard-to-prove insider accusations.
The Financial Conduct Authority (FCA) often struggles with the ossified approach to justice. The failure to produce a timely report on the implosion of Neil Woodford’s fund management empire comes to mind.
It is therefore fascinating to see the FCA launch a criminal case against former Janus Henderson analyst Redinel Korfuzi, who has been accused of profiting from transactions at five companies, with co-conspirators.
The perpetrators allegedly used derivatives to disguise bets that stocks would fall after official announcements. They then allegedly sought to distribute the winnings, estimated by the FCA at £1.5m, through money laundering.
The case, now referred to Southwark Crown Court, is fascinating. At stake is the prestige of asset manager Janus Henderson.
The contemporaneous nature of the offenses, allegedly from 2019-21, and the relatively small profits add interest.
Split among multiple parties, the gains are modest in a world where debt runs into the billions, and bitcoin genius Sam Bankman-Fried of FTX’s alleged electronic fraud runs into the billions.
If criminal prosecution has the effect of deterring other potential wrongdoers and encouraging a cleaner market, it will be worth it.
To take off
The discrepancy between optimistic UK trade sales and profit figures and official and survey data is a puzzle.
After heartbreaking Christmas sales figures from retailers (which continue to pour in), airlines are showing that traffic is soaring.
After three years of losses largely linked to Covid-19, no-frills carrier Easyjet forecasts a return to profits this year, pushing shares up 10%.
Over the past three weekends, passenger numbers have reached record levels. As summer approaches, Easyjet is increasing flights.
Personally, I was surprised to find that a flight to a destination in the Canary Islands next month was nearly full.
According to polls, consumer confidence has been and remains at rock bottom.
The Bank of England spooked the country with its warnings of a squeeze in real incomes.
Truly? Easyjet chief executive Johan Lundgren said he was surprised by the resilience of demand. He is not alone.
Ryanair reported record bookings last week and shares of all UK and Ireland-based carriers rose sharply.
That doesn’t mean all is well. As a BA passenger in Prague on Sunday, I was held up for four hours amid a succession of increasingly incredulous excuses ranging from a crew member stuck in Edinburgh, to fog, ice and to missing documents.
We were then comforted on board by the finest bottle of water ever and a food service of half a dozen mini pretzels.
If BA shrinks it further, the bag will be empty. So much for that old friend on the way out: customer service.
As the behemoth of the UK general insurance sector, with 10% of a competitive market, investor fear of Aviva has dealt a severe blow to its property cover since the December cold.
In this case, it was around £50m. This is an improvement on Direct Line’s £90million hit, which sent shares tumbling. The suspicion is that after several profit warnings, Direct Line has been wrecked.
Aviva’s better underwriting and risk performance will hopefully mean it can build loyalty by keeping premiums low.
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