Sweden Working Diligently On Insider Trading Cases

06 Aug 2013

Using a UK model last year, Auditors Price Waterhouse Coopers (PWC) warned that they had identified suspicions of insider trading in 46% of Sweden's share sales. The researchers knew what to look for by establishing what the 'standard deviation' in a company's share price was. PWC researcher Fredrik Ljung told Sveriges Radio (SR) last year that any deviation from that standard deviation cannot be explained by publicly available information. At the same time, his colleague Robert Engstedt, a former prosecutor, said that about 40 to 60 percent of notifications from the stock exchange go on to a preliminary investigation. In 2012, authorities dealt with 40 cases of suspected insider trading. According to the newspaper Svenska Dagbladet (SvD), reported on Monday, the stock exchange had already filed 35 suspicious cases from January to June this year. Banks and other financial institutions can log their concerns too. Ekobrottsmyndigheten (EBM), the Swedish Economic Crime Authority has received 87 cases last year and so far it received 54 cases this year from them. If the rate of the report were to stay the same until the end of 2013, it means there is a 20% increase in cases. SvD also reported that the rate of investigations leading to charges has also picked up with three cases having made it to the prosecutor's office so far in 2013, and four cases went to court last year. However, EBM prosecutor Martin Tidén told the newspaper that a transaction that looks suspicious does not have to be suspicious if looked at a wider trade pattern. He gave an example that if one actor trades the same stock every day, then it is not odd that they bought shares just before the company presents a big new order.