Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

U.K. Inside-Trading Suspects Said to Face Charge Decision

U.K. Insider-Trading Suspects Said to Face FSA Charging Decision
The Financial Services Authority won a case against six men in July in the largest insider-trading prosecution it’s brought so far. Photographer: Simon Dawson/Bloomberg

Four people arrested by Britain’s financial regulator as part of its highest-profile insider-trading investigation, including a former Deutsche Bank AG managing director, may learn next week whether they’ll be charged, according to two people familiar with the probe.

Prosecutors’ decision on Martyn Dodgson, who was employed by Deutsche Bank at the time of his arrest, and three others comes more than two-and-a-half years after the Financial Services Authority arrested seven people and raided 16 addresses in London and southeast England in March 2010. Two more suspects were arrested later.

All four won’t necessarily be charged on Oct. 1 and at least one is expected to be cleared, said one of the people, who declined to be identified because the information isn’t public. They are all scheduled to appear at police stations that day to learn the outcome of the investigation. The remaining five will face charging decisions later. Dodgson is being investigated for providing tips about upcoming securities sales.

Those arrested in 2010 include Dodgson, Julian Rifat of Moore Capital Management LLC, Clive Roberts, the head of European sales trading at Exane BNP Paribas, Novum Securities Ltd.’s Graeme Shelley and Iraj Parvizi, a director at Aria Capital Ltd. Rifat isn’t expected to face a charging decision next week, according to one of the people.

The investigation is code-named Tabernula, Latin for little tavern, and is focused on whether the men engaged in the front-running of block trades. Investigators are seeking to determine if the suspects profited by using knowledge of upcoming securities sales, generally on behalf of a client.

Significant Profits

“It is believed that the city professionals passed inside information to traders -- either directly or via middlemen --who traded on this information and have made significant profits as a result,” the FSA said at the time of the first arrests in the case.

Dodgson was a member of a group of about 12 bankers at Deutsche Bank who advised the U.K. government on its stakes in Royal Bank of Scotland Plc and Lloyds Banking Group Plc.

“Deutsche Bank cooperated fully with the authorities in their investigation into this matter,” the bank said in an e-mailed statement. “The investigation concerned one individual, Martyn Dodgson, and not the bank itself.”

The FSA won a case against six men in July in the largest insider-trading prosecution it’s brought so far. The defendants were found guilty of profiting from trading on inside information taken from the print rooms for UBS AG and JPMorgan Chase & Co. In another recent FSA case, former Dresdner Kleinwort banker Christian Littlewood and his wife were ordered to pay 1.6 million pounds ($2.6 million) after they were found guilty of insider trading.

More Searches

The regulator conducted more searches in April 2011 and arrested a man in the case. A ninth suspect, Paul Milsom, then a trader at Legal & General Group Plc’s investment-management arm, was arrested by the FSA in February. An office and home in London and a residence in Kent were searched at the time.

Front-running is a practice in which a trader takes a position to capitalize on advance knowledge of a transaction large enough to influence the price of securities. Bankers often alert select money managers to planned sales of securities before companies publicly disclose them. The guidance they get from fund managers helps underwriters measure demand for the securities so they can price them properly.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.