Jim Armitage: Out-of-the-blue claim of Stock Exchange rigging is meaningless without evidence

 

Outlook Just when you thought two investment banking scandals in five days was probably enough – Barclays and Goldman Sachs both being rapped over their “dark pools” trading operations – along comes another.

Or is it? The casual manner with which the MP Mark Garnier, a former investment banker and hedge fund manager, tossed into the Treasury Select Committee hearing the “fact” that the Stock Exchange was routinely rigged had something of the molatov cocktail-wielding anarchist about it. But is it true? Does Mr Garnier actually have any evidence at all apart from a dose of hearsay from his mates still on the trading floor?

For the news business, his outburst was fantastic stuff – yet more dramatic City wrongdoing for us all to get worked about.

But for the thousands of investors with shares in the £5.5bn London Stock Exchange, it could have proved to be less thrilling. It could have resulted in a share price rout.

Could it herald a costly new inquiry into the LSE’s systems? Class action lawsuits from the US? Who knows?

As it happened, the LSE’s shares did not budge, although that could have been because the comment came late in the trading day. Today could be different.

Brokers and sources at the LSE speaking to The Independent last night were flummoxed: “We just don’t see how it could be done,” they said – perhaps slightly admiringly. Others pointed out that so much share trading was now done on rival exchanges to the LSE, not to mention those dark pools at other banks, that to rig a price was nigh on impossible. It might have been an issue in decades past, they said, but not now. After all, the LSE’s closing prices are not set by a handful of blokes on a conference call like gold or, in days past, Libor, they said.

Now, I’m not for a minute saying it definitely doesn’t happen. It certainly has in the past: remember the Flaming Ferraris? Three of them were caught rigging Swedish share prices before celebrating their winnings with their favourite Ferrari cocktails. Dubai-based investor Rameshkumar Goenka managed it too, with an obscure stock of Reliance Industries quoted in London. He also got caught and paid the price – a £4m fine in 2011 in his case.

The fact is, we just don’t know if it’s a widespread problem. It didn’t look like Mr Garnier had any actual proof either. And that’s the point: such potentially market sensitive accusations should not just be tossed about by MPs in rooms full of journalists, Hansard transcribers and fellow politicians.

If share price rigging is the major issue he says it is, he should either have presented evidence to the hearing, or raised it with the regulator in private and asked for a proper investigation. Going off half-cocked is of no help to anyone.

Arts and Entertainment
TVShow's twee, safe facade smashed by ice cream melting scandal
News
newsVideo for No campaign was meant to get women voting
News
A photo of Charles Belk being detained by police on Friday 22 August
news
News
news
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Sport
Alexis Sanchez celebrates after scoring his first goal for Arsenal in the Champions League qualifier against Besiktas
sportChilean's first goal for the club secures place in draw for Champions League group stages
Arts and Entertainment
Amis: 'The racial situation in the US is as bad as it’s been since the Civil War'
booksAuthor says he might come back across Atlantic after all
Extras
indybest
Life and Style
Google Doodle celebrates the 200th birthday of Irish writer Sheridan Le Fanu
tech
Arts and Entertainment
Vinyl demand: a factory making the old-style discs
musicManufacturers are struggling to keep up with the resurgence in vinyl
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

C# Developer (C#, ASP.NET Developer, SQL, MVC, WPF, Real-Time F

£40000 - £48000 per annum + benefits+bonus+package: Harrington Starr: C# Devel...

C# Swift Payment Developer (C#, ASP.NET, .NET, MVC, Authorize.N

£45000 - £60000 per annum + benefits+bonus+package: Harrington Starr: C# Swift...

DevOps Engineer - Linux, Shell, Bash, Solaris, UNIX, Salt-Stack

Negotiable: Harrington Starr: A fast growing Financial Services organisation b...

Trade Desk FIX Analyst - (FIX, SQL, Equities, Support)

£50000 - £60000 per annum + excellent benefits: Harrington Starr: An award-win...

Day In a Page

Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone
Amazon is buying Twitch for £600m - but why do people want to watch others playing Xbox?

What is the appeal of Twitch?

Amazon is buying the video-game-themed online streaming site for £600m - but why do people want to watch others playing Xbox?
Tip-tapping typewriters, ripe pongs and slides in the office: Bosses are inventing surprising ways of making us work harder

How bosses are making us work harder

As it is revealed that one newspaper office pumps out the sound of typewriters to increase productivity, Gillian Orr explores the other devices designed to motivate staff
Manufacturers are struggling to keep up with the resurgence in vinyl records

Hard pressed: Resurgence in vinyl records

As the resurgence in vinyl records continues, manufacturers and their outdated machinery are struggling to keep up with the demand
Tony Jordan: 'I turned down the chance to research Charles Dickens for a TV series nine times ... then I found a kindred spirit'

A tale of two writers

Offered the chance to research Charles Dickens for a TV series, Tony Jordan turned it down. Nine times. The man behind EastEnders and Life on Mars didn’t feel right for the job. Finally, he gave in - and found an unexpected kindred spirit
Could a later start to the school day be the most useful educational reform of all?

Should pupils get a lie in?

Doctors want a later start to the school day so that pupils can sleep later. Not because teenagers are lazy, explains Simon Usborne - it's all down to their circadian rhythms
Prepare for Jewish jokes – as Jewish comedians get their own festival

Prepare for Jewish jokes...

... as Jewish comedians get their own festival
SJ Watson: 'I still can't quite believe that Before I Go to Sleep started in my head'

A dream come true for SJ Watson

Watson was working part time in the NHS when his debut novel, Before I Go to Sleep, became a bestseller. Now it's a Hollywood movie, too. Here he recalls the whirlwind journey from children’s ward to A-list film set
10 best cycling bags for commuters

10 best cycling bags for commuters

Gear up for next week’s National Cycle to Work day with one of these practical backpacks and messenger bags
Paul Scholes: Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United

Paul Scholes column

Three at the back isn’t working yet but given time I’m hopeful Louis van Gaal can rebuild Manchester United
Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

Kate Bush shows a voice untroubled by time

A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
Robot sheepdog technology could be used to save people from burning buildings

The science of herding is cracked

Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

This tyrant doesn’t rule

It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?