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Moore Capital Busted In Biggest Ever Insider Trading Raid In UK

Tyler Durden's picture




 

Earlier today the FSA announced that in the first ever operation carried out between British regulators and the Serious Organized Crime Agency,"16 addresses have been searched this morning in London, the South East
and Oxfordshire in the FSA’s largest ever operation against insider
dealing." Furthermore, " Six
men including two senior city professionals at leading city
institutions and one city professional at a hedge fund have been
arrested on suspicion of being involved in a sophisticated and
long-running insider dealing ring." And what has just been announced by the BBC is that multi-billion hedge fund Moore Capital, run by billionaire Louis Bacon, is likely about to suffer the same fate as our very own Galleon.

From the FSA press release:

It is
believed that the city professionals passed inside information to
traders (either directly or via middlemen) who traded based on this
information and have made significant profits as a result.

The
operation was carried out by 143 FSA personnel together with officers
from SOCA as part of a joint investigation that commenced in late 2007.

The BBC's Roger Peston updates:

I understand that the hedge fund raided by the FSA and SOCA this morning was Moore Capital.

This is a huge development as Moore Capital has long been one of the world's largest and best performing hedge funds. The fallout of this case will be severe for hedge funds both in the UK and across the Atlantic.

 

Here is a summary of Moore's top holdings, which will likely now follow the same firesale fate as Galleon's. The biggest holding: Bank Of America, at just over $534 million worth.

  • Bank of America: $534 million
  • Max Capital Group: $223 million
  • Mastercard: $106 million
  • SPY: $103 million
  • EEM: $93 million
  • CME Group: $83 million
  • Assured Guaranty: $74 million
  • Trading Emissions: $58 million
  • Banco Santander: $55 million
  • Citigroup: $45 million

And a whole lot of unknown bond and CDS holdings

 

 

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Tue, 03/23/2010 - 14:01 | 273414 Joe Sixpack
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"And a whole lot of unknown bond and CDS holdings"

 

How about Greek CDS?

 

How about Volkswagen stock?

Tue, 03/23/2010 - 14:08 | 273419 carbonmutant
carbonmutant's picture

Cameron McKenna said: “This isn’t quite a US-style dragging people off the trading floor, but it’s going that way. The FSA is striking to maintain the good name of the City. But the proof of the striking is in the jailing, and we will have to wait several years before we know whether FSA has found a smoking gun or a damp squib.”

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_...

Tue, 03/23/2010 - 14:13 | 273421 Cognitive Dissonance
Cognitive Dissonance's picture

"....have been arrested on suspicion of being involved in a sophisticated and long-running insider dealing ring."

Must be unofficial insider dealing. We all understand the purpose of the "authorities" by now, right? They are there to keep the competition or hanger-ons out of the game, or at least disorganized and ineffective.

The purpose of the bribes paid to the police and judges during the heyday of the US mob was to make sure the "made" men weren't hassled but everyone else was. In order to understand what's going on, just spool up a copy of "Godfather" or some other classic gangster movie.

Tue, 03/23/2010 - 14:11 | 273424 chindit13
chindit13's picture

Incredible.  I'd be surprised if Bacon himself was involved.  An underling maybe, trying to juice his return for a good bonus, but Bacon is better than this.  Wasn't he rumored to be one of the funds taking large Greek sovereign CDS positions?  If so, Euro's are playing hardball.

Tue, 03/23/2010 - 14:25 | 273434 Leo Kolivakis
Leo Kolivakis's picture

Not good, the Brits like their bacon extra crispy. :)

Tue, 03/23/2010 - 15:52 | 273555 Whizbang
Whizbang's picture

+1000

Tue, 03/23/2010 - 14:33 | 273447 stickyfingers
stickyfingers's picture

As Balzac once said,"The secret of a great success for which you are at a loss to account is a crime that has never been found out, because it was properly executed." Until now.

 

Wed, 03/24/2010 - 04:35 | 274162 ToNYC
ToNYC's picture

if Honoré Balzac could speak country music, he'd a' said it like this!

http://www.youtube.com/watch?v=wHcxXFW5-Vs

Tue, 03/23/2010 - 14:33 | 273448 Jo
Jo's picture

Peston said on BBC main news that it's an employee acting on his own account, not the company.

 

Possibly.

Tue, 03/23/2010 - 15:17 | 273501 Stuart
Stuart's picture

of course it was.   A rogue trader, just like Madoff did it all by himself too.

Tue, 03/23/2010 - 19:56 | 273910 carbonmutant
carbonmutant's picture

Him and Oswald.

Tue, 03/23/2010 - 14:37 | 273449 Alitak
Alitak's picture

Just an aside, why is the US charging Diamler with bribery? Isn't this 'de rigeur' in the Senate and Congress, no charges there!

Tue, 03/23/2010 - 14:50 | 273460 Winterland
Winterland's picture

From the BBC article:

"Moore Capital's understanding is that the FSA is probing private dealings by the trader, rather than trades for the firm. If true, that would limit the reputational damage to the firm."

 

C'mon ZH, you are entering the Yellow Journalism zone here.

Tue, 03/23/2010 - 14:57 | 273473 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

I think their biggest crime was the dreck stocks they were in possession of.

Tue, 03/23/2010 - 15:09 | 273490 nedwardkelly
nedwardkelly's picture

"Serious Organized Crime Agency"

There I was thinking this was one of your made up agency names, only to discover it's real. That sure is imaginitave. I wonder if there is a "really serious organized crime agency"

Tue, 03/23/2010 - 15:12 | 273493 Miles Kendig
Miles Kendig's picture

Time to replace one fraud with another in the news cycle.  Rinse & repeat

Tue, 03/23/2010 - 15:48 | 273544 chet
chet's picture

If only we had an organization like this in the US to pursue insider trading.  Perhaps some sort of "commission", charged with policing "securities" and "exchanges."  Wouldn't that be something?

Tue, 03/23/2010 - 21:53 | 273987 bbbilly1326
bbbilly1326's picture

haha very droll............:~)

Tue, 03/23/2010 - 15:54 | 273556 Whizbang
Whizbang's picture

Fannie and Freddie hearings happened today. I saw Elizabeth Warren at the hunan dynasty on independence. It was kind of neat, but I forgot to ask her for a job.

Tue, 03/23/2010 - 21:09 | 273963 Budd Fox
Budd Fox's picture

Louis Bacon himself doesn't trade stocks.

He trades macro, so sovereign CDS and currencies.It is now confirmed they are investigating an individual for trades on his own account, not for the firm. Sorry, ZHers, this time you fell prey of sensationalizing ...there will not be a dissolution of Moore Capital.

Wed, 03/24/2010 - 07:41 | 274213 Grand Supercycle
Grand Supercycle's picture

 

USD index continues to get stronger, and we know what that means ...

http://www.zerohedge.com/forum/latest-market-outlook-0

Wed, 04/14/2010 - 07:15 | 299631 mark456
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