The U.K. Financial Conduct Authority suffered a blow on Monday when Konstantin Vishnyak was acquitted of destroying documents that would be crucial to his trading activity. The acquittal comes after the FCA dropped another insider trading investigation against Vishnyak.
Vishnyak had admitted to removing WhatsApp from his phone before turning it over to authorities in an insider-trading case, but said he did so to “keep his friendship with one of the most wanted men in Britain a secret,” according to Bloomberg. It also raises questions for what can be done in the future if regulators suspect someone of trying to hinder an ongoing investigation.
Tim Thomas, who formerly worked at the FCA on enforcement cases commented: “It’s a difficult offense to prosecute, and more difficult these days because of the way people communicate with each other. If individuals are smart enough to use Whatsapp or Signal and then delete communications, it becomes very difficult to prosecute.”
The acquittal is receiving more attention than usual because the FCA rarely brings cases to trial. “When they do bring cases, they don’t tend to lose,” Thomas commented.