Belfast Telegraph

Sunday 13 July 2014

Watchdog reports doubling of suspicious stock market trading

The number of suspicious stock market trades reported to the City watchdog have more than doubled during the past five years, figures have shown.

The Financial Services Authority received around 20 suspicious transaction reports (STRs) a month in 2005, but this had ballooned to just over 50 a month by last year, according to figures obtained by the Telegraph newspaper under the Freedom of Information Act.

Overall, there were 115 STRs in the second half of 2005, compared with 309 in the final six months of 2010. The reports cover three main areas, namely the misuse of information, false or misleading information and distortion or manipulation of the market.

The vast majority of the reports fall under the misuse of information category, suggesting insider dealing.

But the regulator stressed that the figures did not necessary reflect an increase in wrong-doing, but simply be due to greater reporting levels by City institutions.

Lee Alam, of the FSA market monitoring team, said: "The biggest part of the increase is undoubtedly due to ongoing educational work.

In addition, some of it is down to increased emphasis on case work. Firms are seeing the increased enforcement action we are taking and know we are achieving results on the back of their STRs.

"They have also seen we are willing to take action against brokers who fail to meet their obligation to submit STRs."

The watchdog conducts a preliminary investigation into all STRs, while a longer investigation is conducted in around 80% of cases, but only around 30 cases are being actively prosecuted at any one time.

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