The FCA has launched criminal proceedings against BlackRock portfolio manager Mark Lyttleton for insider trading.
Lyttleton is charged with three counts of insider dealing between 2 October 2011 and 16 December 2011.
The offence is punishable by a fine or up to seven years imprisonment.
Formerly a star manager, Lyttleton ran the BlackRock UK Absolute Alpha fund from its launch in April 2005 until April 2013, at one point managing £2bn in assets.
He was arrested on April 30 2013 on suspicion of insider trading, having stepped down from his role at BlackRock. The UK Absolute Alpha fund had suffered five years of underperformance relative to its sector prior to this, with gains of just 0.1 per cent, according to Hargreaves Lansdown.
Nigel Ridge was appointed co-manager of the fund in April 2013, joining Nick Osborne, who has been a co-manager since January 2008. The fund now has £283m in assets under management.
A spokesperson for BlackRock says: “The FCA has informed us that the charges against a former employee relate to alleged actions carried out in 2011 for his personal gain, while off our premises, and that neither BlackRock, nor any employee, was under investigation.
“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.”