The Financial Services Authority fears hedge funds are encouraging brokers to commit market abuse, reports the Daily Telegraph .
Margaret Cole, the FSA's director of enforcement, raised her fears in a speech to US regulators. Her comments are the strongest public warning to date from the FSA about the relationship between hedge funds and brokers. The paper reports Cole as saying: "Some hedge funds may be testing the boundaries of acceptable practice with respect to insider trading and market manipulation. In addition, given their payment of significant commissions and close relations with counterparties, they may be creating incentives for others to commit market abuse.” Cole said the FSA was targeting brokers ...
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