EquitiesMay 14 2013

Ex-BlackRock star arrested in insider dealing probe

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ByBradley Gerrard

Former BlackRock manager Mark Lyttleton was arrested last month as part of an insider dealing probe conducted by the city regulator, it is understood.

The manager, who left the world’s largest asset manager in March this year, is understood to have been arrested by the City of London Police on April 30 in connection with an insider dealing investigation by the Financial Conduct Authority (FCA).

The FCA released a statement on May 3 which said a 41-year-old man and a 37-year-old woman were arrested and questioned in connection with an investigation into insider dealing and market abuse.

According to reports by the Financial Times, the pair were released without being charged.

At the time, the FCA said no further details could be confirmed and added no individuals had been charged. The arrests were not linked to any other ongoing insider dealing investigation, the regulator added.

It said business and private premises in Switzerland were also searched by the Swiss authorities in connection with the FCA’s investigation.

A statement from BlackRock, which did not name Mr Lyttleton, confirmed someone who used to work at the company was arrested by the City of London Police on suspicion of insider dealing.

It added the allegations related to actions carried out “off our premises” and that neither BlackRock nor any other employee “is under investigation”.

“There is no suggestion that there has been any impact to any of BlackRock’s clients,” the company added.

“The alleged behaviour is totally contrary to the firm’s principles and values.

“BlackRock strongly supports aggressive enforcement of the law in these matters. The firm has been aiding and will continue to aid the authorities with their investigations.”

Mr Lyttleton joined BlackRock as a graduate trainee and took over management of the UK fund in 2001, the UK Dynamic fund in 2003, and then managed the UK Absolute Alpha fund from its launch in 2005.

In spite of strong initial performance, Mr Lyttleton’s funds have underperformed recently, with both UK Dynamic and UK Absolute Alpha in the bottom quartile of their sectors in one, three and five years.

Mr Lyttleton handed over sole management of the UK fund to Nick Little in February 2012.

In May last year, BlackRock told Investment Adviser that the manager was taking an extended three month break to “resolve family issues”.

Mr Lyttleton could not be contacted for comment.