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FSA Demand Tighter Control Of Takeovers

While insider dealing has been a problem since time began, the Financial Services Authority has again issued another warning to those in the industry, demanding that confidentiality obligations are honoured and leaks are plugged. Even thought the regulators have spent literally millions of pounds trying to solve the problem of leaked information, insider trading and ultimately ‘unexplained’ share price movements it seems as though the issue has not yet been resolved.

One reason why insider trading is still rampant in many areas of the stock market is the fact that a number of high profile insider dealing court cases have floundered. It seems that for many people the chance to make big money is more attractive than potential jail sentences of anything up to seven years.

Over the years the corporate finance sector has made numerous attempts to plug the more common leaks but it seems as though the sheer amount of people involved in each deal may be the problem. We are talking about bankers, lawyers, stock brokers and shareholders for at least two different parties being involved. This has increased the potential for leaks to the market and the subsequent threat of insider trading, which is all too apparent when many takeovers and important announcements are reviewed.

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