A former hedge-fund trader at AKO Capital LLP was charged by the U.K. financial regulator with insider trading in transactions involving 22 different shares.
Anjam Ahmad, 38, was charged with one count of conspiracy to commit insider dealing relating to trades between June and August 2009, the Financial Services Authority said in a statement today. Ahmad was at AKO Capital until September 2009, according to the FSA’s register.
“The FSA has gone to great pains to point out that it has charged a hedge-fund trader as they see that as great PR,” said Darren Fox, a regulatory lawyer at Simmons & Simmons, who isn’t involved in the case. “They definitely have hedge funds in their sights post-Galleon and post-financial crisis.” The founder of New York-based Galleon Group LLC, Raj Rajaratnam, will face U.S. insider-trading charges at a trial in October.
The FSA is trying to stamp out insider trading after criticism from lawmakers that it wasn’t doing enough to prevent the crime. Opposition Conservatives have threatened to disband the agency should they win next week’s election.
Robert Brown, Ahmad’s lawyer at London-based Corker Binning, declined to comment. Ahmad faces a maximum of seven years in jail if found guilty.
“We were shocked when, subsequent to his departure from AKO Capital, we were notified by the FSA that it was investigating,” said David Woodburn, a compliance officer at London-based AKO Capital who confirmed that Ahmad used to be an execution trader there. The transactions in question were personal, and AKO Capital hasn’t been accused of wrongdoing, he said.
Released on Bail
Ahmad was released on bail and will appear at a London court next week. He was previously an investment adviser at Citigroup Inc.’s London unit until 2007, according to the FSA register.
Ahmad was one of three men arrested in January after searches at four London addresses. Inquiries are still pending against the other two men, according to Chris Hamilton, an FSA spokesman.
The case isn’t connected to separate searches on March 23 that resulted in the arrests of workers at companies including Deutsche Bank AG and Moore Capital LLC.
The FSA is prosecuting a separate case in a London court against two former corporate lawyers, its fourth case to reach jury trial. It won the previous three cases after never prosecuting the crime before January 2008.
To contact the reporters on this story: Caroline Binham in London at firstname.lastname@example.org