The UK's determination to get tougher on insider dealing could be paying off, with a key indicator of illegal share trading falling for the first time in years.
The level of suspicious share price movements ahead of takeover announcements last year was the lowest since 2003, according to figures released by market regulator the Financial Services Authority.
But despite the positive trend, the data still suggest that insider dealing is rife: 21 percent of takeover announcements were preceded by abnormal share trading activity in 2010 (The figure for 2009 was 31 percent.)
The FSA said the figures showed it had made progress in “executing a credible deterrence and enforcement approach.” During the year is secured five criminal convictions for insider dealing with sentences ranging from 12 months to three years and four months. It has 13 other defendants who are awaiting trial.
But the regulator was careful not to appear complacent about the insider dealing threat: “While this fall has taken place against the backdrop of increasing focus on market abuse, due to the nature of the statistic, the reason behind this decline cannot be determined with certainty,” it said.