FSA to tape traders' mobile calls
TRADERS' mobile-telephone calls may be taped in an effort to stamp out insider trading, according to proposals from the U.K. financial regulator.
Cell phones used for business shouldn't be exempt from rules requiring banks and brokerages to record employees' calls, that the Financial Services Authority can listen to later, under proposals the agency said may take effect as soon as next year. Around 22,000 phones would be covered, the FSA said.
"Some would say that it is about time that mobile-phone technology should catch up with the procedures for other communication types," said Tony Woodcock, a lawyer at London- based Stephenson Harwood.
"But it does mean that determined miscreants will find other means such as private mobiles, or others' mobiles, to effect the trading more clandestinely." The US insider-trading case against Galleon Group's chief executive officer, Raj Rajaratnam, was brought using evidence in part from mobile-phone conversations the government got permission to wiretap.
The FSA is increasing efforts to stamp out insider trading after criticism from lawmakers that it wasn't doing enough.
It won a jail sentence against a former trader last week for the crime which can receive a seven-year sentence.