Richard Burger comments in Compliance Week on the FCA's use of Suspicious Transaction and Order Reports
The U.K. has recently initiated a series of comprehensive crackdowns on financial
fraud, particularly in the financial services sector. A recent enforcement action
highlighted the effectiveness of one of the Financial Conduct Authority’s (FCA) lesser-known tools in its fight to combat insider trading—the Suspicious Transaction and Order Report (STOR).
In January, the FCA announced a fine for an oil rig consultant who had used inside information to make a profit, by gaining knowledge of whether oil and gas deposits had been discovered by oil companies he worked for. As a result, he bought shares after learning of discoveries -- but before announcements were made which increased the share price.
The FCA was initially alerted to this trading through STORs submitted by one of the firms being dealt with. Unlike SARs, Suspicious Action Reports used to tip off financial crime generally, STORs are used to uncover market abuse.
Richard Burger, Partner in our Dispute Resolution team, comments on the use of STORs in Compliance Week:
STORs are evidence the City is policing itself. Regardless of the FCA’s own surveillance systems and sources, firm-led reports and intelligence support the regulator to police and maintain the integrity of the financial markets, which are so important to the economy and the U.K.’s position as a centre of excellence for financial services.
Read the full article in Compliance Week here (subscription required).
