Carnegie employee in insider trading probe

Carnegie AB said an employee working at its investment banking division in Sweden has been questioned by police and named as a suspect in an insider trading investigation.

Andreas Koch, head of investor relations at Carnegie, said the individual was arrested yesterday and is being actively questioned by police. But as yet, he has not been charged. He said no other Carnegie staff have been arrested.

“Today the police have also searched his work place here in Stockholm, and we are cooperating with the relevant authorities,” added Koch. “But as yet there’s no indication that any other of our people are involved.”

The company’s admission comes after Svenska Dagbladet reported this morning that the Economic Crimes Bureau is investigating another large Swedish insider trading ring in the country.

“We don’t know if there is a connection (between this reported investigation and the Carnegie employee). There might be, but we have no indication of that right now,” said Koch.

This year Sweden has been rocked by revelations of numerous insider trading rings operating within its tight-knit financial community, where everybody knows everybody and where many players attended the same Stockholm business school.

In June, the Swedish government wrote to Carnegie demanding that it explain how a 630 million kronor trading scandal perpetrated by some of its staff over a two-year period had occurred.

Three Carnegie traders inflated dealing profits by that sum between 2005 and 2007, forcing the Nordic investment bank to admit it had overstated profits by 227 million kronor.

Koch said today’s arrest is entirely separate from the overstated profits scandal. “There’s no linkage at all,” he said.

An unknown investor has bought 3.5 million shares (4.5 percent of capital) in

Carnegie worth 400 million kronor through Glitnir, Svenska Dagbladet also reported

this morning.