Suspicious trading before 41% of takeovers sets new UK record
Annual FCA data shows abnormal trades hitting new highs amid deal frenzy for UK companies
Suspicious share trading activity occurred before more than four out of 10 UK takeover announcements last year, a record high that adds to concerns at the financial watchdog about leaks and insider trading.
The Financial Conduct Authority said that abnormal trading activity it detected in share prices in the two days before takeover announcements rose from almost 38 per cent of deals in 2024 to 41 per cent in 2025.
The deterioration in the regulator’s “market cleanliness” data, along with sharp increases in abnormal trading ahead of other sensitive market announcements, is a setback for the FCA, which aimed to reduce financial crime as one of the four key objectives in its new strategy last year.
The FCA has been increasingly worried about deals and other sensitive information being leaked or used for insider trading and last year its co-head of enforcement and market oversight, Therese Chambers, issued a public warning to market participants.
The watchdog said the increase in abnormal trading ahead of UK takeover announcements pushed it well above the five-year average of 33.7 per cent. It said this was “just one indicator of possible insider trading” and there could be other factors behind it.
“We remained in a period of elevated market volatility, driven by global economic and geopolitical conditions,” the FCA said. “This is likely to have influenced price movements and trading volumes, increasing the number of signals detected.”
Suspicious trading is at record levels as UK takeover activity is also reaching new heights as foreign buyers and private equity snap up London-listed companies.
The watchdog said that despite recent adjustments to the metric’s methodology it “continues to have limitations as a broader measure of market cleanliness”.
Some insider trading could happen before the two-day window the FCA monitors for abnormal share price movements, it said, adding: “Price moves could have been caused by financial analysts or the media correctly predicting likely takeover targets.”
Last year, the FCA called in the heads of M&A from big investment banks to discuss how to tackle the issue of deal leaks alongside the Takeover Panel.
In separate data published alongside the FCA’s annual report on Thursday, it said there were abnormal increases in trading volumes ahead of 8.1 per cent of price-sensitive announcements by UK-listed companies last year, up from 5.6 per cent the previous year.
The FCA said it had secured four convictions for insider trading and fined 12 people a total of £1.77mn for insider trading, market manipulation and making misleading statements in the year to April.
Earlier this week, it charged a former deals lawyer at Goodwin Procter, the US law firm, with insider trading using confidential information gained while working on the sale of maternity brand Seraphine Group.
The watchdog also reported a big increase in UK financial fraud, dealing a further blow to its strategic goal of “fighting financial crime”. Investment fraud more than doubled to a record £1.2bn in the year to April, it said.
Losses from authorised push payment fraud, in which people are tricked into sending money to criminals, rose 19 per cent to £576.4mn in the year to April.
It blamed the rise in fraud on the use of technologies such as AI and cryptocurrencies, which it said “allow fraudsters to operate at greater scale and speed”, adding that market volatility also makes consumers more susceptible to fraud.
The watchdog said it was working with “domestic and international partners, for example, through better data sharing, to stay ahead of criminals” and “supporting wider system-priority work with industry and partners, such as combating money mules”. Last year, it launched a “firm checker” to help consumers spot scams by fake companies.