The two-year insider trading investigation into the activities of Philippe Jabre of GLG Partners, Europe's third largest hedge fund is about to make it's wasy into open hearings, courtest of the FSA. Wall-Street power-house Goldman Sachs may also get a black-eye for the hearings, as their communications with Jabre are at the heart of the investigation. Via the TimesOnline:

Hedge fund star faces ban

The Sunday Times
February 05, 2006
By Peter Koening
and Louise Armitstead

One of Europe’s largest hedge funds and its star trader face censure by the City regulator as early as this week over an insider-trading scandal that has rocked the financial capital. Sources close to the Financial Services Authority (FSA) say Philippe Jabre, a fund manager at GLG Partners, may be fined and barred from trading after a two-year investigation. GLG, his employer, could be fined.

But people familiar with the investigation say GLG and Jabre are already considering appeals. So far the probe has taken place behind closed doors. An appeal would be held in public before The Financial Services and Markets Tribunal, a body that has been critical of the FSA in the past. An open hearing may prove embarrassing for the FSA as well as for Goldman Sachs, the US investment firm that managed the 2003 stock sale by Japan’s Sumitomo Mitsui bank, which is at the heart of the FSA’s investigation.

GLG and Jabre are expected to argue Goldman supplied privileged information about the stock sale in a way that left Jabre free to deal without breaking insider trading rules. GLG and Jabre are also expected to claim that Goldman and the FSA sat on evidence that supported this defence...

More details on the specific allegations (and the actions that led to them) can be found in the full article.

-- MDT

Labels: Financial Services Authority, insider trading, Philippw Jabre