Suspicious trades hit record low

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The Financial Conduct Authority (FCA) yesterday announced that suspicious share price movements ahead of mergers have fallen to a record low after a crackdown on market abuse.

The regulator, which replaced the Financial Services Authority in April with a remit to take a harder line on financial crime, said that 14.9 per cent of mergers in 2011-12 were preceded by unusual market moves two days before the announcement.

This compares with 19.8 per cent in the 2010-11 financial year, which had been the lowest since records began in 2003.

Etay Katz, a financial services lawyer at City law firm Allen & Overy, said the fall in suspicious trades was not a surprise given the very substantial efforts dedicated to enforcement.

“The trend would appear to strengthen the hand of the regulator to make them continue to focus on this area until they get a consistent level of reduction,” Katz added.