Sweden probes ‘doubled’ insider trading cases

Sweden probes 'doubled' insider trading cases
Suspected cases of insider trading are on the up in Sweden, with financial crimes investigators looking into as nearly as many cases in the past six months as in all of 2012.

“One reason could be increased market activity, and maybe we have become stricter,” Stockholm Stock Exchange spokeswoman Annika Poutiainen told the Svenska Dagbladet (SvD) newspaper on Monday.

Auditors Price Waterhouse Coopers warned already last year that using a UK model, they had identified suspicions of insider trading in 46 percent of share sales in Sweden. Establishing what the “standard deviation” in a company’s share price was, the researchers knew what to look for.

“Any deviation from that standard deviation that can’t be explained by publicly available information,” PWC researcher Fredrik Ljung told Sveriges Radio (SR) last year.

“About 40 to 60 percent of notifications from the stock exchange go on to a preliminary investigation,” his colleague Robert Engstedt, a former prosecutor, said at the time.

In 2012, authorities dealt with 40 cases of suspected insider trading. SvD reported on Monday that from January to June this year, the stock exchange had already filed 35 suspicious cases.

Banks and other financial institutions can also log their concerns. The Swedish Economic Crime Authority (Ekobrottsmyndigheten – EBM) has so far this year received 54 cases from them, while the annual figure for last year was 87 – which would mean a 20-percent increase if the rate of report were to stay the same until the end of 2013.

The rate of investigations leading to charges has also picked up, SvD reported – three cases have made it to the prosecutor’s office so far in 2013, while four cases went to court last year.

“A transaction that looks suspicious doesn’t have to be suspicious if you look at a wider trade pattern,” EBM prosecutor Martin Tidén told the newspaper. “If, for example, one actor trades the same stock every day, then it isn’t odd that they bought shares just before the company in question presents a big new order.”

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