Former Morrisons’ boss charged with insider dealing

By Michael Stones contact

- Last updated on GMT

Former Morrisons' boss Paul Coyle has been charged with two counts of alleged insider trading and markets abuse
Former Morrisons' boss Paul Coyle has been charged with two counts of alleged insider trading and markets abuse

Related tags: Morrisons, Tns worldpanel, Asda

Morrisons’ former treasurer and head of tax, Paul Coyle, has been charged with two offences of insider dealing by the Financial Conduct Authority (FCA).

The charges, brought this week (September 29), cover trading in Ocado Group shares between February and May 2013. Coyle was arrested at his Harrogate home in December of that year, as part of a FCA probe into alleged markets abuse.

Coyle was suspected of buying shares in Ocado before its £216M distribution partnership with Morrisons was announced. Shares in the online retail and distribution business rocketed after the deal was revealed in May 2013. He was suspended from the retailer in January. The supermarket was understood to have started negotiations with Ocado in March 2013.

Morrisons acknowledged the charges following the 2013 arrest. It said in a statement: “The FCA’s insider dealing investigation did not concern Wm Morrison Supermarkets plc nor any other Morrisons employee.

‘The company’s procedures had been properly followed’

“Morrisons is satisfied with its governance and procedures concerning the handling of market sensitive data in this case and found that the company’s procedures had been properly followed. These accusations, if proven, would be the result of an individual acting alone.”    

Morrisons's shares dipped 0.7%, after the FCA released details of the charges against Coyle. Ocado's shares were 1.3% down at 263p.

Polarisation of the UK grocery market

The news comes at a difficult time for Britain's forth biggest retailer. Along with the other big three supermarkets – Tesco, Sainbury and Asda – increasingly find their margins underpressure due to the growing polarisation of the UK grocery market. All four had lost ground to the agressive cost-cutting policies of discounters Aldi and Lidl, while sales at posh retailers Waitrose and Marks & Spencer had also risen.

Following accusations that insider trading wasd rife, both the FCA and its forerunner, the Financial Services Authority, have sought to clamp down on markets abuse.

The FCA said it had achieved 24 convictions connected to insider dealing. It was also prosecuting a further eight people for the same offence.  

Meanwhile, Tesco is enduring another difficult week, after the Grocercies Code Adjudicator Christine Tacon asked it to include a review of its supplier policy​ in its recently announced independent financial review. The review was announced last week in response to the embarrassing admission that it had overstated its half-year profits by up to £250M​. 

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