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FSA investigation rules that rumours are ok

After perhaps one of the most irrelevant investigations that the FSA has ever done the association today announced that spreading rumours is okay as long as those on the receiving end are aware that it is unsubstantiated gossip. However, the FSA is suggesting that in times of market turmoil silence could be called golden in order to retain market confidence and reduce the spread of inaccurate rumours.

During the investigation the FSA spoke to 50 companies in the city and canvassed their thoughts and feelings on the subject. The truth is that rumours drive markets and rumours have been around since the first trade was ever instigated. There is a suggestion that investment companies and those connected to the financial markets should introduce a rumours policy to their handbook to ensure that staff are aware of their responsibilities in this matter. Yet again, this seems to suggest a self-regulatory framework of the kind which has been ripped apart over the last few months by the UK come in. If this is the case, the question as to the point of investigation must be a valid observation?

The FSA has been notoriously unsuccessful in bringing insider trading and associated cases to court with the onus of proof very much on the side of the prosecutors. There have also been suggestions that due to the complex nature of many insider trading cases a public jury may not be the best way forward.

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