The Financial Services Authority (FSA) is continuing its crackdown on insider trading by instigating its third criminal prosecution this year.

The regulator has charged Matthew Uberoi and Neel Uberoi with 17 counts of insider dealing in an indictment filed at the City of Westminster Magistrates' Court.

The FSA has accused the pair, who are related, of exploiting inside information to trade thousands of shares in two companies - NeuTec Pharma and Gulf Keystone Petroleum - over a four-month period in 2006. Neither could be reached for comment.

News of the prosecution has emerged days after the FSA announced its most significant insider-dealing case to date. Last week it charged Malcolm Calvert, a former partner in Cazenove, with 12 counts of insider dealing between 2003 and 2005, after he had retired from the stockbroker. Mr Calvert, who indicated a plea of not guilty last week, is the first financial services employee to be prosecuted by the FSA since it assumed criminal prosecution powers in 2001.

The FSA's only other criminal case is against Christopher McQuoid, former general counsel of TTP Communications, a telecoms company, and James William Melbourne, who also deny wrongdoing.

Ian Mason, a partner in Barlow Lyde & Gilbert, the law firm, said that the third prosecution showed that the FSA was starting to make an impression in its role of cleaning up financial markets. However, Mr Mason, a former head of enforcement for the regulator, said that it was “one thing for the FSA to bring a case and another to win it”.

One reason the FSA has shied away from criminal prosecutions is that offences are very difficult to prove. To secure a conviction, the FSA must convince a jury that a defendant knew that he was using inside information and that the only reason he traded was on the basis of this information.

Despite the FSA's recent success in bringing charges, Adam Epstein, a partner in Mishcon de Reya, said: “The FSA is all about deterrence. You can't help thinking that what the FSA needs in order to deter people is a big scalp.”

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