FCA charges former BlackRock star manager with insider dealing

FCA headquarters in Canary Wharf

FCA has launched a criminal insider dealing case against former BlackRock manager Mark Lyttleton

The City regulator said in a statement on September 29 that Lyttleton, 45, who was arrested in April 2013, has been charged with three counts of insider dealing. Lyttleton could face a seven-year jail sentence if found guilty.

The FCA said the offences related to trading in equities and a call option between October 2, 2011 and December 16, 2011.

Lyttleton has been summoned to attend City of London Magistrates Court on September 29. He is being represented by the solicitors at Peters & Peters. The law firm was not immediately available for comment.

A senior manager of UK equities, he left BlackRock in 2013.

The world’s largest asset manager, which oversees $ 4.9 trillion, said in a statement: “There was no impact to any of BlackRock’s clients as a result of the alleged actions. The alleged behaviour is totally contrary to the firm’s principles and values, and we strongly support aggressive enforcement of the law in these matters. As charges have now been brought we will not be able to make any further comment.”

Lyttleton is well known in UK fund management, having begun his career with the storied investment firm Mercury Asset Management in the early 1990s, having graduated in chemistry at York University. Progressing from Mercury’s graduate training scheme, he went on to become part of its UK specialist team and later moved to its private clients division.

He stayed with the company following its 1997 takeover by Merrill Lynch Investment Managers, which was later acquired by BlackRock, taking charge of several funds. In early 2013, he managed assets worth some £3.2 billion, according to a fund factsheet at the time. He had stepped down from BlackRock’s core UK equity fund in February 2012, leaving it in sole charge of Nick Little.

Lyttleton’s investment performance suffered during the credit crisis. According to data provider Trustnet, a fund he managed on behalf of St James’s Place fell in value by a cumulative 4.2% in the five years to March 2013, against a 21.1% gain by its peers over the same period. Over three years to March 2013, the fund was up 0.9% against a gain of 19.2% by his peers.

Lyttleton took a sabbatical at BlackRock between June and September 2012, citing family reasons, before leaving six months later.

His arrest in 2013 came amid a crackdown on alleged insider trading by the UK’s main financial regulator.

In its annual report for the year ended March 2016, the FCA said it had seen an increase in the percentage of takeover announcements that had shown abnormal pre-deal price movements during 2015, rising to 19% from 14.3% the previous year. In June, Damian Clarke, a former equities trader at Schroders, was handed a two-year prison sentence after pleading guilty to nine counts of insider dealing.

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