The Financial Services Authority stepped up a gear in its quest to clamp down on market abuse in the City by charging seven people as part of its "Project Saturn" investigation.
The 13 charges, based on allegations that cover a two-year period and involve alleged unlawful profits of £2.5m, stem from eight arrests in July 2008 and relate to dealings in a number of listed companies, including the media group Reuters, the IT firm Misys and the engineering group Morgan Crucible.
The FSA said it had charged Pardip Saini, Paresh Shah, Neten Shah, Bijal Shah, Truptesh Patel, Mitesh Shah and Ali Mustafa in respect of a conspiracy to deal on inside information obtained by the defendants from two investment banks. One defendant has also been charged with an offence in relation to money laundering, while a warrant for the arrest of another person in connection with the investigation has been issued. The seven have been bailed to appear before City of Westminster magistrates on 14 April. The charges also relate to dealings in Thus Group, Enodis, Fiberweb, GCap Media, Vega Group, Premier Oil, Abbot Group, Biffa and Laidlaw International.
In a sign of the complexity of the watchdog's insider dealing investigations, the inquiry, which is not linked to last week's dawn raids in other parts of the City, involved a team of 35 investigators, lawyers and support staff studying more than 75 electronic devices containing over 200,000 electronic files. The FSA also looked into 130 individual trading accounts and took more than 250 witness statements as part of the 21-month investigation.
Separately, Gartmore, the funds firm which saw its share price plunge after revealing that it had suspended the fund manager, Guillaume Rambourg, on Tuesday amid an inquiry into a breach of internal procedures, confirmed that Mr Rambourg was fined €300,000 (£267,000) by Italian regulators for front-running a broker note. The suspension is unrelated to the fine, Gartmore said, adding that it was appealing against the Italian decision.
Earlier, Gartmore's chief executive, Jeff Meyer, sought to ease fears by saying that there had been "no material redemptions" from clients since the announcement.
Mr Meyer confirmed that Mr Rambourg, a long-standing colleague of the high-profile fund manager Roger Guy, was suspected of directing the firm's dealers to use certain brokers when conducting trades, adding that no individual broker appeared to have been particularly favoured.
Gartmore's shares, which fell by more than 30 per cent on Tuesday, made a partial recovery yesterday, closing almost 8 per cent higher last night.Reuse content