UK insider dealing probe eyed 50 cases-prosecution

* FSA examined links to 50 possible market abuse cases

* Three defendants “distantly related”

* Trial expected to begin May 3, 2011

LONDON, April 22 (BestGrowthStock) – Britain’s largest insider
dealing investigation looked at 50 cases of possible market
abuse before focusing on the trades in 12 UK-listed companies, a
UK court heard on Thursday.

In a preliminary Crown court hearing, the prosecution said
Ali Mustafa, Truptesh Patel, Mitesh Shah, Neten Shah, Paresh
Shah, Bijal Shah and Pardip Saini were only charged with 13
counts of insider dealing in the strongest cases looked at by
the Financial Services Agency (FSA).

One of the 12 companies includes media group Reuters, during
its 2007 takeover by Thomson Corp (TRI.TO: ) (TRI.N: ) of Canada.

Insider dealing cases are notoriously hard to prove, as
evidence can often be dismissed as circumstantial.

But the FSA is determined to crack down on market abuse and
last month stunned the London financial industry with the
dramatic arrests of seven insider dealing suspects — including
several senior executives — in an operation codenamed
“Tabernula”, which is Latin for “little shop”. [ID:nLDE62N1WU]

The defendants in court on Thursday, aged between 29 and 48,
stand accused of using confidential information gleaned from the
London printers of Swiss Bank UBS (UBS.VX: ) (UBS.N: ) and UK
brokerage Cazenove (JPM.N: ), in a case dubbed “Saturn”.

The prosecution alleged it had discovered documents that
contained evidence the defendants had tried to crack the codes
used by the banks to protect their clients’ names using Internet
search engines such as Google (GOOG.O: ).
Some of the men, who sat silently in the dock during the
proceedings, are related. Bijal Shah, Paresh Shah and Neten Shah
are “distantly related”, according to the prosecution, while
Mustafa’s brother is “connected” to the extended Shah family.

The FSA, which is seeking the extradition of an eighth
suspect, last month charged the men and alleged insider dealing
had netted them 2.5 million pounds. Mitesh Shah was also charged
with spread betting to launder proceeds. [ID:nLDE6300OX]

The court set a May 3, 2011, start date for the official
trial, which could last three to four months. The men face up to
seven years in jail if found guilty.

Investment Research

($1=.6501 Pound)
(Reporting by Kirstin Ridley; editing by Karen Foster)

UK insider dealing probe eyed 50 cases-prosecution