Nearly four out of every ten UK takeover announcements last year were preceded by suspicious trading activity, according to the Financial Conduct Authority’s latest market cleanliness statistics. The 37.8% figure for 2024 represents a five-year high and a sharp jump from 30.3% in 2023.

For context, this metric sat at roughly 10% back in 2018. In six years, the rate of abnormal share price movements ahead of takeover announcements has nearly quadrupled.

What the numbers actually measure

The FCA’s Market Cleanliness Statistic, or MCS, tracks abnormal price movements in target company shares before takeover announcements become public. When a stock inexplicably surges right before a buyout offer drops, it raises the obvious question: who knew, and when did they know it?

The FCA itself is careful to note that its statistic is just one measure and does not definitively prove insider trading. Abnormal price movements can result from legitimate speculation, analyst predictions, or even coincidence.

Research by White & Case adds another layer to this story. The law firm found that nearly 40% of UK takeovers in 2024 were impacted by what it termed “forced announcements,” where speculative trading activity effectively forced companies to confirm or deny deal discussions earlier than planned.

A market integrity problem with real consequences

The trajectory here is striking. In 2018, the FCA’s metric hit its low point at around 10%. The subsequent climb back up, through 19% in 2016’s historical context, 30.3% in 2023, and now 37.8% in 2024, represents a reversal that regulators cannot ignore.

Some of the increase may be attributable to revised methodological approaches in how the FCA collects and analyzes data. But methodology changes don’t fully explain a nearly fourfold increase from the 2018 low, and the FCA has not suggested its revised approach is the primary driver.

The rising prevalence of unusual pre-announcement trading is likely to trigger more aggressive enforcement under the UK Market Abuse Regulation, known as MAR.

When suspicious trading forces early disclosure, it can torpedo negotiations, alter deal terms, or invite competing bids that might not have materialized otherwise.