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| Jon Macaskill is one of the leading capital markets and derivatives journalists, with over 20 years’ experience covering financial markets from London and New York. Most recently he worked at one of the biggest global investment banks |
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The former Blue Index brokers charged with insider trading in the UK in late November were also far from the top of the City pecking order. They were brokers in contracts for difference – simple derivatives used to take leveraged stock positions that have a reputation for attracting disreputable financial types, even though they are also widely used for legitimate trades.
There is little confidence among bankers and investors that investigations into market abuses will remain confined to the financial fringes, however.
Preet Bhahara, the US attorney for Manhattan, recently stated that insider trading is rampant and he has been steadily widening the scope of a probe that initially focused on hedge fund Galleon and its founder, Raj Rajaratnam.
Subpoenas and interviews by federal investigators indicate that Bhahara and FBI investigators have been pursuing enquiries relating to SAC, a hedge fund run by Steve Cohen, one of the highest-profile investors in the US.
