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Arresting Innocent People All Part Of UK Regulator’s Plan To Scare The Insider Trading Out Of Them

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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15 Responses to “Arresting Innocent People All Part Of UK Regulator’s Plan To Scare The Insider Trading Out Of Them”

  1. Guest says:

    Shoot first, ask questions later.

  2. quant me maybe... says:

    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. Guest says:

    Seems like they are adopting a Nanex approach to regulating

  4. guestimate says:

    Someone at FCA finally read 1986. Bingo!

  5. MontyP says:

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

  6. If Matt came over here and commented on his own post

  7. you know Matt links to DB all the time