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UPDATE 2-Two arrested after UK, German insider probe raids

Published 11/02/2010, 08:43 AM

* One male professional, one woman arrested in London

* Investigators raid addresses in London, Germany

* Arrests not linked to ongoing insider dealing cases

(Adds details, background)

LONDON, Nov 2 (Reuters) - Two people have been arrested in London on suspicion of insider trading after investigators raided two addresses in the UK and one in Germany, Britain's top financial regulator said on Tuesday.

The Financial Services Authority (FSA) said that a 37-year-old professional man and a 28-year-old woman had been arrested after the joint operation with the police and prosecuting authority in the central German state of Hesse.

"No further details can be confirmed at this time," the FSA said in a brief statement. "The arrests are not linked to any other ongoing insider dealing investigation."

The Frankfurt prosecutor's office declined to comment.

The man, who was authorised by the FSA, is likely to have been working in the financial services sector and have been aware of the relevant laws and regulations governing insider dealing, one source familiar with the arrests said.

The raids, in the early hours of Tuesday, were carried out in London and in Koenigstein, near the German city of Frankfurt.

The FSA, which lost an insider dealing case in June, is keen to keep up the pressure on market abuse as it prepares to fight high-profile cases in court next year as part of a quest to clean up London and prove its mettle as a prosecutor.

The regulator has secured six prison sentences for insider dealing to date, although two were suspended and former Cazenove partner Malcolm Calvert -- one of its highest-profile scalps -- was released after serving just seven months in jail.

Seven other suspects have yet to be charged. They include senior executives at Deutsche Bank and Exane, part-owned by France's BNP Paribas, and a trader at hedge fund Moore Capital -- who were arrested in a dramatic swoop in March codenamed "Tabernula".

Bail was extended in September and the suspects are expected to be up for questioning early next year.

(Reporting by Kirstin Ridley in London and Edward Taylor in Frankfurt; Editing by Hans Peters and Andrew Callus)

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