LONDON – The UK Financial Services Authority’s (FSA) crackdown on insider dealing has been subject to a legal challenge. In particular, the case against Malcolm Calvert, a former partner at Cazenove stockbrokers, has been put on hold while a legal challenge raised by Calvert’s lawyers is decided.
The legal challenge concerns whether the FSA has the legal authority to launch prosecutions on its own without the consent of the director of public prosecutions or secretary of state. Calvert has pleaded not guilty to 12 counts of insider dealing.
Lawyers acting for Neel and Mathew Uberoi, charged with 17 counts of insider dealing, have also challenged the FSA’s case, this time claiming the regulator had not followed correct procedures or obtained consent.
Should the decision go against the FSA, these cases are likely to be thrown out. The FSA has claimed it has followed correct procedures and will appeal if the ruling goes against it.
The cases form part of the UK supervisor’s renewed efforts to crack down on market abuse and are the first criminal cases it has brought for insider dealing.