Insider trading in the City has long been a dark force. A few years ago the then FSA was boasting that it had managed to reduce 'suspicious' trades pre M&A announcements from 33% of all trades down to 25%.
It is an achievement, but from a pretty low base. Clearly, people in the know in the City were doing well.
Then since have some a raft of cases for insider trading. Often against relatively minor people and also for people making a few tens of thousands or maybe a £100k. That sounds like a lot of money but as we know, bankers are not motivated to ruin careers for money that would not cover one years bonus.
Today though the court has upheld a charge against Ian Hannam, a very well known and respected banker. For in 2008 he emailed discussions to a Kurdistani politician about a potential merger between Genel and Heritage Oil. Hannam maintains, that as a regulator and politician, he would have known this was sensitive information.
The judgement of the Court suggests that Hannam had not followed the law and informed the recipient that this was sensitive information. I have to wonder, having a little knowledge of how corrupt Kurdistan is, whether this would really make much difference. Reading between the lines' this is clearly Hannam's view.
But still, an example has been made of a senior Banker. In the US there have been three large cases of late of a more clear cut nature - Steve Cohen's SAC has not recovered from the scandal of its behaviour which has exposed a more egregious nature than Hannam's - far more pervasive.
Overall, I am glad the FCA continues to push the insider trading cases forward. Fairer markets are a must, especially as High Frequency trading further erodes the chances of retail investors getting any returns. Hannam is still a scapegoat example though, not that it seems to have damaged his business as Strand Partners is a success.