Claire Cross comments on FCA findings – insider trading declining to five year low

Partner, Claire Cross comments in the Financial Times on recent data from the Financial Conduct Authority (FCA), finding that indications of potential insider trading have declined to five-year lows, even though suspicious stock market moves still occurred before 30 percent of UK takeover announcements last year.

The FCA said it detected abnormal trading volumes of shares and derivatives ahead of 5.6 per cent of price-sensitive announcements in 2023, the lowest since data collection began in 2018. Potentially anomalous trading before market-sensitive announcements also fell to its lowest on record, dropping to 3.3 per cent last year.

This year, the FCA also secured its first two convictions for insider trading since 2019.

Commenting on the developments, Claire said that the regulator has “continued to make a concerted effort to crack down on insider dealing” and this “may well have deterred some individuals who might otherwise have committed this form of market abuse”.

She noted that, while the data seemed to be heading in the right direction, the decline in suspicious activity could indicate that insider dealers were becoming more sophisticated.

“They are aware of what is likely to catch the FCA’s attention and tailor their trading accordingly,” she said. “As such they are less likely to be trading in a fashion that is captured by the methodology utilised to obtain these results.”

You can read the full article in Fincancial Times.