LONDON â" Mark Lyttleton, a former BlackRock fund manager, has been arrested in connection to an insider-trader investigation in Britain, according to two people briefed on the matter.
The arrest on April 30 of Mr. Lyttleton, 41, and an unidentified 37-year-old woman comes as the British financial regulator, the Financial Conduct Authority, continues to clamp down on market abuse in Londonâs financial district after a series of recent scandals.
Mr. Lyttleton, who oversaw the firmâs underperforming UK Dynamic and BlackRock UK Absolute Alpha funds, left the firm on March 28 and has not been charged with any wrongdoing. His departure from BlackRock was not connected to the regulatory investigation, the people added, who spoke on the condition of anonymity because they were not authorized to speak publicly.
Under British law, individuals can been arrested as part of continuing investigations but may not eventually face prosecution for potential wrongdoing. Any prospective indictments in the case would not be issued until late in 2013, at the earliest, one of the people said.
Earlier this month, the Financial Conduct Authority of Britain said two individuals had been questioned about insider trading and market abuse, and several homes and offices had been searched in Switzerland in connection to the investigation.
BlackRock confirmed on Tuesday that a former employee had previously been arrested by City of London police on suspicion of insider trading. It said the allegations were related to personal activities by the individual and were not connected to dealings related to the firmâs clients.
âThe alleged behavior is totally contrary to the firmâs principles and values,â BlackRock said in a statement on Tuesday. âThe firm has been aiding and will continue to aid the authorities with their investigations.â
Spokesmen for the Financial Conduct Authority and BlackRock declined to comment further on the investigation. A representative for Mr. Lyttleton was not immediately available for comment.
Since the beginning of the financial crisis, British authorities have tried to shake off a reputation for light-touch regulation by aggressively tackling market abuse allegations.
Over the last four years, the Financial Services Authority, the predecessor to the Financial Conduct Authority, has successfully prosecuted 23 individuals for insider trading. Seven other people are facing prosecution on similar charges.