A former compliance officer at UBS, Fabiana Abdel-Malek, will stand trial this week in London on 10 counts of insider trading.
She will take the stand alongside Walid Choucair, a “prolific” day trader whom the UK’s Financial Conduct Authority accuses of using inside information passed by Ms Abdel-Malek to place trades in stocks such as Kabel Deutschland, Elizabeth Arden and Targa Resources between 2013 and 2014. The watchdog says Mr Choucair, 39, made more than £1m in profit from inside information gleaned by Ms Abdel-Malek in the course of working at the Swiss bank.
The defendants deny the charges and will face a jury trial of several weeks at London’s Southwark Crown Court. Insider trading carries with it a maximum seven-year jail sentence.
It is not just the defendants being judged; much is at stake for the FCA, which is the UK’s main fighter of insider trading. The agency has a record number of cases of the crime that it is investigating, with 87 live cases, according to its most recent data.
But its case against Ms Abdel-Malek, 36, and Mr Choucair is the first major one to make it to jury trial in over two years. Since 2016, the UK’s financial markets seem to have become murkier. Suspicious trades have ticked up to their highest level in eight years, with share prices of UK listed companies moving abnormally ahead of more than one in five takeover announcements, according to FCA data.
That has led to questions over whether the lack of prominent trials over the intervening period for alleged market abuse and insider trading has had an effect. The FCA is also scrutinising suspicious share moves at companies such as FirstGroup and Virgin Money.
The last major case of insider trading prosecuted by the FCA was the most complex to date, dubbed Tabernula, and resulted in five convictions. One strand of the £14m case went to trial in 2016: a former Deutsche Bank corporate broker and his friend were convicted but three other men — including two day traders — walked free after the 12-week trial.
The watchdog had never prosecuted insider trading before 2008. Since then its cases have targeted more sophisticated alleged rings and City insiders, after its initial cases against dentists and interns.
Still, comparisons with the United States are not favourable. Last year, the US Securities and Exchange Commission, the main securities regulator, brought 41 insider-trading cases last year.
“The FCA have long-trailed their intention to crack down on insider dealing in the City, and this effort is beginning to see results,” said Christopher David, a white-collar lawyer at WilmerHale. “It does though remain to be seen whether they can convert investigations into convictions, and whether there will be a contingent effect on behaviour.”
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