A former City trader has been found guilty of using insider information in consort with an associate to earn several hundred thousand pounds from spread trading. The trader, originally from South London, set up a spread betting scheme whereby sensitive information was channeled from the fund at which he worked to a friend, who then bet on the relevant indices to make a substantial trading profit totaling almost £600,000, shared between the two men on a 60/40 basis in favour of the unnamed associate. The co-operation of the accused was taken into consideration in sentencing, resulting in an openly more lenient sentence.
In addition to substantial fines from the Financial Services Authority, the offending trader will be required to pay fiscal fines of £50,000 while repaying the extent of his gains, and serving some 300 hours in community service.
This is yet another step by the Financial Services Authority to tighten its regulatory grip on the spread betting markets, and breeds confidence in the organisation’s ability to clamp down on illegal and illegitimate trading practices to protect the integrity of the markets and the spread betting brokers. With oversight of most areas of trading the sentence sends a clear message to would-be market abusers that insider trading will not be tolerated in any form, shoring up the confidence of law-abiding traders in the markets and indices on which they invest.