FCA 'looking into' Carillion insider dealing claim

The Financial Conduct Authority (FCA) is "looking into" claims of insider dealing at Carillion (Frankfurt: 924047 - news) ahead of the now-collapsed construction firm's first profit warning in July last year.

The revelation was made in correspondence between the regulator and the chair of the work and pensions select committee, Frank Field, who subsequently made the detail public.

Carillion had announced on 3 January - less than two weeks before its collapse - that the FCA was examining the "timeliness and content" of announcements the company had made between 7 December 2016 and 10 July 2017.

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In his letter to Mr Field the chief executive of the FCA, Andrew Bailey, said the watchdog was continuing to investigate whether statements made by Carillion were "false and misleading".

He also said: "We are aware of allegations of insider trading in Carillion's shares prior to its trading update on July 10 2017 and are looking into them."

The FCA said that while there was no formal inquiry into the claims yet, they were forming part of its wider investigation.

Insider dealing - also known as insider trading - is an illegal practice whereby a person could potentially use confidential information for their own financial benefit through share trades.

A joint inquiry by the work and pensions and business committees concluded last month that the company's demise on 15 January, with debts of up to £7bn including £2.6bn in pension liabilities, was primarily down to the actions of the board and a series of oversight failures.

Just days ago The Pensions Regulator (TPR) - among the bodies accused by MPs (BSE: MPSLTD.BO - news) of being too timid in its approach to Carillion - said it was considering issuing a demand for former Carillion directors to contribute to the company's pension black hole.