The Financial Services Authority (FSA) has begun a market abuse investigation into all the companies involved in the recent takeover battle for Resolution, the financial services group.
The regulator is suspicious about a series ofinformation leaks into the market during the four month clash, and has concerns that some of the parties may have divulged market sensitive information to the press, before making formal announcements via the London Stock Exchange's regulatory News Service.
The contest began in July when Resolution said it was merging with the ailing life assurer Friends Provident. Pearl and Standard Life put paid to the creation of "Friends Financial" the proposed name for the merged company when they made separate bids for Resolution. Although Standard Life's offer was the first to receive a recommendation from the Resolution board, Pearl eventually triumphed last month after a series of twists and turns. The deal is expected to complete in February.
The FSA is believed to have asked all four companies to make their own internal investigations, outlining who had access to market sensitive information, and whether they found any evidence of leaks. The companies are interviewing their advisers, lawyers and public relations staff and will report back to the regulator early in the new year.
The regulator has increased its efforts to crack down on market abuse over the past few years, after finding that as many as one in three takeovers are preceded by "informed [share] price movements", caused by market sensitive information being leaked before it is officially announced.
A spokesman for the FSA declined to comment yesterday .Reuse content