FSA says 8 arrested in insider dealing probe

LONDON (Reuters) - The Financial Services Authority, the financial regulator, said eight people were arrested across London and the south-east of England on Tuesday as part of a major inquiry into insider dealing.

In a brief statement, the FSA said a team of 40 of its staff, backed by officers from the City of London police, also had searched premises across the region.

"This is a major investigation for the FSA," a spokeswoman for the watchdog said, declining to provide further details.

The City of London police declined to comment.

UBS said in a statement that a junior member of the Swiss bank's London support staff has been arrested and that the employee had been suspended from work while the investigation continues.

JPMorgan Cazenove, a joint venture between the broker Cazenove and U.S. bank JPMorgan Chase, said that a subcontractor in its support function was one of the eight people arrested.

The FSA, long accused of not doing enough to tackle insider dealing and market abuse, has this year taken a tougher approach, more than doubling its team of lawyers and investigators with criminal expertise.

The watchdog, which until earlier this year had not brought any criminal prosecutions for insider dealing since acquiring the power to do so in 2001, currently has three insider dealing cases involving five defendants before the courts.

They include Malcolm Calvert, a partner at investment bank Cazenove until he retired in 2000, who last week pleaded not guilty to several charges of using privileged information on a string of mergers or takeovers between 2003 and 2005.