Chris Blackhurst: Insider dealing is still rife in the City no matter how you count the numbers

Midweek View

In 2008, the then chairman of HBOS, Lord Stevenson, told the bank’s shareholders: “There is a strong case for believing that the UK is exceptionally bad at dealing with white-collar crime. Only two weeks ago I was in New York and two people were convicted of insider dealing. We appear not to pursue things in the same way.”

There are those who will mock Lord Stevenson’s remark, coming as it did from the head of a bank that subsequently had to be rescued by the UK Government. But putting that on one side, there’s no doubt he had a point.

It’s been reinforced again with publication by the Financial Services Authority in its final annual report of data surrounding abnormal trading patterns ahead of takeover announcements (the FSA is now split between the Prudential Regulation Authority, Financial Conduct Authority and Bank of England). There’s a self-congratulatory air to the FSA finding. In 2003, more than 30 per cent of takeovers involving listed companies were preceded by some out-of-the-ordinary trades. In 2010, it was down to 21.2 per cent and in 2012 it fell again to 14.9 per cent.

“The fall took place in a year of weak takeover activity and against a backdrop of the FSA’s continuing focus on market abuse and enforcement activity in this area,” the FSA said.

Another way of looking at this is that someone is making a killing from insider information in one in seven mergers. Even though the number of such deals is down, that’s still a hell of a lot. And it is not reflected in the tally of successful prosecutions. There have been some, but nowhere near enough. One in seven does not smack of a regime that has insider dealing beaten.

Feelgood factor returns to the City

I’ve not seen my City pals so cheery for a long time. The weather helps, as do the victories of the British Lions, Andy Murray, and the England cricketers. But this feelgood factor goes deeper. There is a belief around that the next two years are going to see something like a return to pre-crisis activity.

My fund manager chum was especially optimistic. Companies are sitting on tonnes of cash, IPOs are heading London’s way, the economy is turning, and the eurozone has not collapsed. It’s all pointing one way, he said, literally rubbing his hands.

A new kind of growth at Goldman Sachs

Has a stubbly chin ever excited so much speculation? According to the Financial Times, “when [Lloyd] Blankfein’s beard materialised over Christmas it was seen as a symbol of a broader change of style at the bank”. Blimey, there was I, thinking that Mr Blankfein had just forgotten to shave when, apparently, it was a deliberate signal that the bank he runs, Goldman Sachs, was to shift direction.

This vignette is contained in a full-page report on Goldman ahead of the appearance in court of its former trader Fabrice Tourre. My favourite line? “In recent months Goldman has gone out of its way to counter criticism – that it mistreats clients, is disconnected from society and generally puts profits ahead of ethics…” Is that all?

To be fair to Goldman it is tackling it head on. Half of the bank’s 30,000 staff have been through a “reprogramming process”. I don’t want to be cynical and poke fun, I really don’t. Oh, go on then. That means half of the bank’s 30,000 staff have not. Right now it’s 50/50 if you get the good Goldman or bad Goldman. Of course, all 30,000 will be “reprogrammed” eventually. Don’t you just love the choice of language? What it suggests is that the nice, touchy-feely banker in front of you is actually a machine, a robot who does not believe in treating you well, being connected to society, and putting ethics ahead of profits.

Meanwhile, there is drama in the Blankfein household when wife Laura tells him she does not like his beard after all. What should he do? To shave or not to shave? Aaaagh, the perils of high office.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral