Red faces at failure to enact EC law: The hard-bargaining, high-living former head of Germany's biggest union is a fallen hero after an insider dealing scandal. John Eisenhammer reports

WHEN Hilmar Kopper, the head of Deutsche Bank, recently complained that legislation outlawing insider trading 'is clearly overdue and I cannot understand why it is taking so long', he was speaking for many in the international financial community.

It is almost a year after the July 1992 deadline to comply with an EC directive on insider trading. But Germany's draft legislation remains bogged down in official committees, with little prospect of being put into action in the foreseeable future.

What was an awkward delay has, with the Steinkuhler affair, suddenly become a serious embarrassment. Suspicions of insider trading prompted by the Steinkuhler affair have swung the spotlight back on to what appears to be Germany's lax attitude to an act that is a criminal offence in every other big financial centre in the world. Until now, Germany's eight regional stock exchanges have tried to prevent insider trading through voluntary codes. But a rash of scandals in recent years has exposed how ineffective these voluntary arrangements are.

What was for long appreciated by locals as Frankfurt's cosy, clubby atmosphere is now increasingly seen as unacceptable provincialism, and a serious hindrance to the city's bid to challenge London for the position as Europe's main financial centre.

Frankfurt's lax attitude to insider dealing is now taken by many as evidence of its failure to compete as an international financial market.

Last weekend, Karl-Otto Pohl, the former chairman of the Bundesbank, bemoaned the potential damage to Frankfurt's position caused by the inability of Germany's legislators to get to grips with the problem.

Frankfurt's insider trading commission has six staff, compared with the 2,800 staff in the employ of the US Securities and Exchange Commission. Its success rate has been slim, and its censure usually amounts to no more than a slap on the wrist and a requirement to repay any ill-gotten profits.

The commission's president, Carl-Friedrich zur Megede, is a retired judge who does the job on an honorary basis. His modest team is trying to investigate 50 or so bank accounts in connection with the purchase of the Mercedes Holding shares that prompted the downfall of Steinkuhler.

Stung by the renewed criticism of Germany's inadequate protection for investors, Theo Waigel, the Finance Minister, said he hoped the new legislation - including prison sentences of up to three years - would be in effect by the new year.

But the proposals are said to involve a complex system of authority involving the insider trading commissions of the eight regional bourses, with the whole operation overseen by a central supervisory body. This organisation could take a long time to put in place.

In the meantime, because insider trading is not illegal, the only way prosecutors can get at a suspected offender, such as Steinkuhler, is on grounds of having failed to pay taxes on the trading profits.

(Photograph omitted)

Life and Style
tech
Sport
Farah returns to the track with something to prove
Commonwealth games
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
PROMOTED VIDEO
Sport
Shinji Kagawa and Reece James celebrate after the latter scores in Manchester United's 7-0 victory over LA Galaxy
football
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
Life and Style
fashion Designs are part of feminist art project by a British student
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
Arts and Entertainment
Top guns: Cole advised the makers of Second World War film Fury, starring Brad Pitt
filmLt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a uniform
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
Arts and Entertainment
A scene from Shakespeare in Love at the Noel Coward Theatre
theatreReview: Shakespeare in Love has moments of sheer stage poetry mixed with effervescent fun
News
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
books
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

Test Lead - Financial Reporting - Banking - London

£350 - £400 per day: Orgtel: Test Lead, London, Banking, Financial Reporting, ...

Business Analyst, Retail Bank, £375-400p/d

£375 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Farewell, my lovely

Should emergency hospital weddings be made easier?
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

Will The Minerva Project change the face of higher learning?

The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Commonwealth Games 2014: Great Scots! Planes and pipers welcome in Glasgow's Games

Commonwealth Games 2014

Great Scots! Planes and pipers welcome in Glasgow's Games
Jack Pitt-Brooke: Manchester City and Patrick Vieira make the right stand on racism

Jack Pitt-Brooke

Manchester City and Patrick Vieira make the right stand on racism
How Terry Newton tragedy made iron men seek help to tackle their psychological demons

How Newton tragedy made iron men seek help to tackle their psychological demons

Over a hundred rugby league players have contacted clinic to deal with mental challenges of game