Insider Dealer Fined

[glyder]

http://business.timesonline.co.uk/tol/business/law/article6903358.ece

This is a great story about a young work experience student in a bank. The
daft buggers put him to work behind the Chinese walls in the area with price sensitive information.
He thought all his christmases had come at once and used a Chinese food code to pass insider info out to his father. Who made £110K buying before announcments and selling immediately after them...
a tale of silly idiots all round really.....
The clueless bank who puts the intern behind Chinese walls with access to sensitive info, .....the dentist father who thinks he can trade so blatantly on inside information in minor companies and not get noticed by surveilance (duh!), ........and best of all the FSA who were so busy building this case, which thay are so pleased to have won against this minnow that they missed whole financial world collapsing around their ears!!

as one comment below the article hilariously puts it,
At least we know what the FSA have been working on over the past three years during which they failed to spot and regulate the collapse of Northern Rock, the meltdown of the entire UK financial services industry and the reckless trading of bankers with our money! Quite why the FSA are prosecuting an intern is beyond me. Presumably this all cost more than the £100k profit he made!? More public money down the drain. Bring on the Tories and the abolition of this incompetent regulator.

 

[montmorencyt2w]

Ah so the Tories would prefer the Financial Services industry to be completely unregulated then. That would figure.

 

[glyder]

Ah so the Tories would prefer the Financial Services industry to be completely unregulated then. That would figure.

Hi Montmorency,
I think the Tories want the BoE to regulate finacial services in place of the FSA. Its a cosmetic change and will make little difference. Perhaps a slight shift of focus towards more prudent liquidity with a greater degree of regulatory oversight on that side of things (this is beginning to happen anyway with negative impact on the 'real world' of industry, but thats another story), but on the whole the BoE will still need an administration, so that will be made up of the FSA staff reappplying for their same jobs at the BoE.
However, as so many of the rules are set by EU there is not such wide scope for changes or tinkering as George Osborne implies.
The BoE premises are not nearly large enough to house a regulator on top of the functions they already fulfill. So they may as well leave the same people in situ at the FSA's Canary Wharf offices and just put up a new sign saying BoE.
As for financial services being less regulated under tories, it would be hard for there to be less effective regulation than there has been under Labour. Whilst they thought the city was their goose laying golden eggs there was a semi official policy of turning a blind eye. If all looked well the regulator really did not want to dig deeper unless it actually had to act tough eg this was mostly if there was a matter related to an international treaty obligation (money laundering, market abuse).
It was called light touch regulation by principles, rather than rules.
And that actually makes sense good sense to a large extent because it is not prescriptive and allows business to develop without too many inhibiting regulatory constraints.
But under HM Treasury guidelines it was regulated on a too relaxed basis. The regulator was not intrusive enough. Whilst the FSA were labouring under the illusion that all was hunky dory and London was knocking NY off the top financial city position due to the light touch regs attracting business, they were allowing new products to be developed which neither the regulator not the BoE nor the Treasury kept up with nor understood at the time, they were not even necessarily aware they existed. They were not properly regulated products, there was not a category for them in the rules.
This led to boom boom boom as the banks were effectively able to create and print money and lend unlimited amounts. These products along with the ridiculous 'off balance sheet' accounting rules that allowed banks to hide risk in offshore arms length subsidiaries, eventually led to the bust bust bust. As we all know now.

But really I don't think the Tories will fix it, and I don't really blame Labour for it either, not too much anyway, of course being the government they had a hand in it all. I don't blame the regulator either, although they are a pretty incompetent bunch of box tickers. But the thing is I think this bust or another similar bust would have somehow happened under any administration given time, as long as there are human beings involved human nature will cause these bubbles-booms-busts to happen again and again.Forever. I'm pretty certain its all simple human nature at the bottom of it not complicated financial wizardry. The city might seem to be the beating heart of it all but the hunger that drives the greed (and fear) is out there everywhere inside each of us.

Sorry to have gone on so much, considering your short post.To much fine red wine
( £6.99 this bottle!!!!!) I probably just meant to say that on financial regulation the tories the labour the FSA are probably all equally well off course and out of line. As are the EU. I'm not sure about the BoE.

 

[montmorencyt2w]

Not a bad post actually Glyder, so that wine must be all right after all

 

[glyder]

Thanks Mont,
I had a bit of a foggy head the next morning.
But I enjoyed the fireworks.

Re the insider case, on top of it comprising imcompetents all around, I thought some
of the student's lines in court were hilarious.
'I learnt more from watching wall street ... but the biscuits were very good'
it truly says a lot about the city.. lol

 

[oildaytrader]

'I learnt more from watching wall street ... but the biscuits were very good'
it truly says a lot about the city.. lol

Where did the Insider's porche , ferrari ,chelsea flats ,nights out at the berkeley casino etc etc go?He got caught too early.

Next revelation ension funds are filled buy orders at the day's high, difference is paid in bonus .

O D T

 

[clorets]

Where did the Insider's porche , ferrari ,chelsea flats ,nights out at the berkeley casino etc etc go?He got caught too early.

Next revelation ension funds are filled buy orders at the day's high, difference is paid in bonus .

O D T

Yeah that would have made another great trader movie. We need more of these stories.

 

[oildaytrader]

Yeah that would have made another great trader movie. We need more of these stories.

wtf do u know ,trader movie? You on droogs?

Conman movie,misinvestor , yes!

 

[glyder]

Well, they;ve been sentenced now, links below. The boy got 1 yrs inside for passing insider info, and his dad 2years for insider dealing.

The boy was stupid, the dad was greedy. They were wrong and criminal....

But Is this what a regulator should be doing when there is a real financial crisis on.?

Minor insider dealing incident = 2 yrs in prison.
Bringing about financial crashes, irresponsibly runnning banks
ruining economies, businesses and lives = retire into luxury with a whopping great pension
and keep your knighthood.

The FSA picks on the minnows but the real bad uns all get off scott free.

Its a joke.but its not funny.

http://business.timesonline.co.uk/tol/business/economics/article6952566.ece


http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/170.shtml

http://www.dailymail.co.uk/news/art...llegal-profits-stock-market-jailed-years.html

 

[arabianights]

I don't even understand why insider dealing should be illegal. It makes markets more efficient.

 

[glyder]

I don't even understand why insider dealing should be illegal. It makes markets more efficient.

Arabian, there is definitely an argument for that.
And I'd also bet that the average man in
the street expects that paying 'the city' to manage his money would get him some of the benefits of insider knowledge.
Butthe reality os of course that it doesn't and besides, no one would take those risks on someone elses behalf.