FSA Raids Come Amidst Criticism, Abolition Calls

Mar 25 2010 | 1:25pm ET

Faced with intense criticism of its failings during the financial crisis, with the opposition Conservative Party calling for its head, the U.K.’s Financial Services Authority this week made a spectacular bid for survival.

Britain’s main financial services regulator teamed up on a sting operation with the U.K.’s Serious Organised Crime Agency for the first time to nab at least seven alleged insider-traders, including a trader for hedge fund Moore Capital Management. The agency deployed more than 140 people to raid 16 locations across southeastern England, its largest-ever crackdown on insider trading.

The FSA has stepped up its anti-insider-dealing activities in recent months, winning a plea bargain in a case for the first time this month and making its first-ever extradition request.

The regulator has characterized the arrests and raids of the past two days as business as usual. But it comes amidst an environment of high-level carping at the FSA, which has never filed a criminal insider-trading case before 2008.

The opposition Tories, widely tipped to become the largest party in Parliament after elections likely to occur in early March, have pledged to do away with the FSA, which plans to hire 460 new staffers over the coming financial year. The Conservatives say the Bank of England can do a better job of policing the City.

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