Four men, including one of the most senior bankers in the City, were charged yesterday with insider trading by the leading finance watchdog.
The Financial Services Authority (FSA) says that Martyn Dodgson, Andrew Hind, Benjamin Anderson and Iraj Parvizi conducted a long-running conspiracy to trade on inside information between November 2006 and March 2010, netting profits of £3m.
Mr Dodgson is the most high-profile name involved in the case and probably the best-known City figure ever to be charged with insider dealing.
As a high-flying managing director at Deutsche Bank, he was regarded as one of the top bankers in London with impeccable sources in both politics and finance.
Before the scandal first broke he was advising the Treasury on its investment in the bailed-out Royal Bank of Scotland and Lloyds. He had previously worked for other top banks including Cazenove and Lehman Brothers.
All four men were bailed to attend Westminster magistrates' court on 19 October.
They face prison sentences of up to seven years as well as bans from the City if found guilty.
The FSA describes the investigation, dubbed Operation Tabernula, as its largest and most complex insider dealing case to date.
The watchdog has long pledged to clamp down on insider trading, a practice it regards as rife but which is notoriously difficult to prove. It has had some success lately, securing 20 convictions over the last three years.
In this instance the allegation is that the conspirators were "front running" – that is, taking large positions in stocks ahead of clients that are known to be buying the same stocks.
Five other men have also been arrested in connection with the inquiry since 2010, but have not yet been charged. These men include Julian Rifat of the Mayfair hedge fund Moore Capital and Clive Roberts of Exane BNP Paribas.
The FSA said: "A number of individuals remain under investigation."
Messrs Dodgson and Hinds both live in north London. Mr Anderson lives in Surrey and Mr Parvizi in Spain. A lawyer for Mr Parvizi said he "emphatically denies the charges and is determined to clear his name". A lawyer for Mr Dodgson did not return a call seeking comment.
It is thought the FSA case centres on share trading in scores of companies, including household names such as Barclays and National Express.
In March 2010, more than 140 officers carried out dawn raids on 16 addresses across London and the South-east, seizing documents and computers. The investigation is being carried out jointly with the Serious Organised Crime Agency.
The City regulator has pursued a series of insider dealing cases since admitting in 2008 that its light touch approach to policing the Square Mile was not working.
This is easily its most important case, however, and will allow the watchdog, which is in the process of being dismantled and replaced by the new Financial Conduct Authority, to bow out on a high note.Reuse content