Huw Jones London

A FIFTH of company announcements in Britain were preceded by unexplained share price moves, the Financial Services Authority (FSA) said yesterday, in its final report before being wound up next year.

The FSA, criticised by legislators for failing to spot the risk of the financial crisis that was coming, said that 19.8 percent of merger announcements last year were preceded by unusual market moves, an indication of possible insider trading.

Unexplained moves slid a fifth in 2010 to 21.2 percent.

The watchdog has pursued a high-profile “credible deterrence” policy, imposing its highest ever fine on an individual for market abuse of $9.6 million (R79.2m) on Rameshkumar Goenkaon.

The pace of its market clean-up is slowing. One of its main architects, head of enforcement Margaret Cole, has already left, and chief executive Hector Sants leaves this month.

“The FSA must be disappointed to report that suspicious price movements remain at a stubbornly high 20 percent despite vigorous activity against insider dealing,” said Simon Morris of law firm CMS Cameron McKenna.

“The market will view with interest whether the FSA’s replacement, the Financial Conduct Authority, will have greater success – possibly aided by new powers being devised in Brussels.”

The FSA is being scrapped next year and its operations will be split between a new prudential regulation authority at the Bank of England, and a standalone Financial Conduct Authority. – Reuters