Carl Linderum was getting ready for work one morning at his London home when he heard a pounding on his door. He figured the group of men outside were employees of his gas provider, there to badger him over a disputed bill. In fact, they were plainclothes police officers and agents from the U.K.’s financial regulator. They had come to arrest the 36-year-old trader, who ran a small hedge fund, for suspected insider trading. The arrests last February of Mr. Linderum and a colleague led to the collapse of their roughly $100 million hedge fund, Lodestone Investment Partners LLP. Seven people lost their jobs. Nearly 10 months later, the Financial Conduct Authority dropped the investigation of the two Lodestone executives and a third trader from another hedge fund who was arrested at the same time…Margaret Cole, a top agency enforcement official from 2005 to 2012, says high-profile raids and arrests are a key component of the strategy—even if they don’t yield convictions. “A large part of the deterrent effect comes from the regulator doing this, and you don’t know when they might pop up and do it again,” she says. [WSJ via Matt]

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Comments (15)

  1. Posted by Guest | January 6, 2014 at 1:53 PM

    Shoot first, ask questions later.

  2. Posted by quant me maybe... | January 6, 2014 at 1:57 PM

    New low. Direct Linking to the Levine opener. You know what would be killer? If Matt came over here and commented on his own post. That would would be killer.

  3. Posted by The New Killer | January 6, 2014 at 2:03 PM

    With footnotes and charts.

  4. Posted by Guest | January 6, 2014 at 2:10 PM

    I hope Matt is getting commission on this. Those margs don't pay for themselves.

  5. Posted by Guest | January 6, 2014 at 2:13 PM

    Seems like they are adopting a Nanex approach to regulating

  6. Posted by guestimate | January 6, 2014 at 2:14 PM

    Someone at FCA finally read 1986. Bingo!

  7. Posted by Drunk Swap Dealer | January 6, 2014 at 2:28 PM

    I think the Levine Marg/Stella Arbitrage Opportunity Fund is still going strong. Word is they between the east and west village they've got everyone fucked seven ways from Sunday on swaps

  8. Posted by guest | January 6, 2014 at 2:35 PM

    Or it's common courtesy to give a hat tip if you found a link via someone else. Also, you know Matt links to DB all the time, right?

  9. Posted by guest | January 6, 2014 at 2:35 PM

    You lead a sad life.

  10. Posted by guest | January 6, 2014 at 2:37 PM

    you're an idiot.

  11. Posted by Guest | January 6, 2014 at 4:23 PM

    I assume you meant 1984.

  12. Posted by guestimate | January 6, 2014 at 4:32 PM

    Fucking Mondays. yes

  13. Posted by MontyP | January 6, 2014 at 4:46 PM

    -So, logically–
    - If he weighs the same as a duck…
    - He's made of wood.
    - And therefore?
    - An inside trader!

  14. Posted by واتس اب للاندرويد | January 7, 2014 at 4:01 PM

    If Matt came over here and commented on his own post

  15. Posted by واتس اب للاندرويد | January 7, 2014 at 4:10 PM

    you know Matt links to DB all the time