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FCA Investigating Claims of Insider Trading at Carillion

Mon, 9th Jul 2018

The FCA is looking into claims of potential insider trading at Carillion. The construction company went into liquidation after banks refused to led the company any more money. The revelation about potential insider trading was made in correspondence sent to the chair of the work and pensions committee.

In January of this year, Carillion announced that the FCA was examining the timeliness and content of the announcements that the company made between the December 2016 and July 2017. Just weeks after that, the company collapsed.

FCA Chief Executive Andrew Bailey told Mr Field of the Work and Pensions Committee that the watchdog was still investigating whether Carillion’s statements were false or misleading. He said that the FCA was aware of allegations of insider trading in Carillion’s shares prior to the July 10 2017 trading update, and that such concerns were being investigated.

Insider trading is illegal. It is not permitted for those close to a company to use confidential information to get a benefit from share trading. The Work and Pensions and Business Committees concluded a joint enquiry into Carillion’s demise last month. The company collapsed with debts of £7 billion and pension liabilities totalling £2.6 billion. The joint inquiry ruled that the collapse was caused by the actions of the board, and down to a series of oversight failures.

The Pensions Regulator has accused MPs of being too timid in how it approached Carillion, and is considering demanding that the former directors of the company contribute to make up the pension debt.

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