On January 16, Paul Milsom, a former trader at the investment management arm of Legal & General, and Graeme Shelley, a former broker at Novum Securities, appeared at Westminster Magistrates Court charged with insider dealing. Mr Milsom indicated an intention to plead guilty to one charge, encompassing 28 separate instances of passing information to Mr Shelley during the period of 2008 to 2010. Mr Shelley correspondingly faces 28 counts of insider dealing. It is alleged that profits of around £402,000 were split between the two defendants as a result of Mr Shelley placing contracts for difference in the knowledge that large trades placed by Mr Milsom would move the market in a certain direction.

The prosecution arose from a joint investigation by the FSA and the Serious Organized Crime Agency, marking the FSA’s largest insider dealing investigation to date. Five other defendants have already been charged as part of the same investigation, reflecting the FSA’s ever increasing readiness to bring criminal prosecutions against those suspected of market abuse.