FCA closes investigation into Bank of England audio hack by hedge funds

The audio feed contained no inside information and no activity of concern or misconduct was identified by the FCA following the audio hack at the Bank of England.

The UK’s financial watchdog has ended an enquiry into an alleged audio feed hack at the Bank of England last year by hedge funds, stating it found no evidence of misconduct.

In December, the Bank of England confirmed that an internal press conference audio feed had been hacked by high-speed traders seeking early access to information before the rest of the market.

“We have examined these matters fully,” the Financial Conduct Authority (FCA) said. “We do not believe the audio feed contained any inside information, nor have we found any activity of concern or misconduct. Our enquiry is now closed, and we have informed the Bank and other parties connected to the review.

The Bank of England said at the time that the audio feed had been installed as a back-up in case the video feed failed, but it was made accessible to a group of hedge funds by a third-part supplier without the central bank’s consent or knowledge.

The third-party supplier allegedly sold access to the feed to hedge funds for between £2,500 and £5,000 per press conference, as well as a subscription fee.

Hedge funds that accessed the feed reportedly gained information five to eight seconds faster than market participants using the main video feed. Access to press conferences from the US Federal Reserve, the European Central Bank, and the Bank of Canada were also reportedly for sale.

As soon as the Bank of England realised the feed had been hacked, it disabled the supplier’s access and banned them from playing any future role in its press conferences. The institution referred the case to the FCA for investigation.