In February 2003 Philippe Jabre, a fund manager at GLG Partners, the London-based hedge fund, was told about a large convertible bond issue by Sumitomo, the Japanese financial group. What Mr Jabre did next is the subject of an investigation by the UK’s Financial Services Authority that is still dragging on two and a half years later.

The case, which has been the subject of widespread debate in London’s tight-knit hedge fund industry for the past year, has generated some excitement because it is the most visible example of the FSA’s long-awaited crackdown on hedge funds.