The Financial Services Authority (FSA) has charged seven people in relation to alleged insider dealing in the latest crackdown on market abuse by the City watchdog.

The group faces charges on 13 counts of insider trading following a 21-month investigation which relates to dealing in shares of 12 companies, including Morgan Crucible, Misys, Reuters and Enodis, between 2006 and 2008. According to the FSA, activity during the two-year period involved alleged unlawful profits of around £2.5m.

The FSA yesterday (31 March) named the seven men charged as Pardip Saini, Paresh Shah, Neten Shah, Bijal Shah, Truptesh Patel, Mitesh Shah and Ali Mustafa. Two of the men worked within the print rooms at investment banks JP Morgan Cazenove and UBS, while a third worked at spread betting firm City Index.

Mitesh Shah was also charged with money laundering and the FSA said an arrest warrant has been issued for an eighth man in connection with the investigation.

A number of law firms have been instructed to defend those charged. Crowell & Moring's head of international regulatory and corporate crime Gerallt Owen is advising Neten Shah, while London-based Bankside Law managing partner John Williams is advising Patel. Other firms involved include Byrne & Partners and Bird Solicitors.

The defendants have all been released on bail and are due to appear at the City of Westminster Magistrate's Court on 14 April. The move will further bolster expectations among City lawyers of an increasing demand for regulatory advice as the FSA makes good on its promise to take a tougher enforcement stance.

News of the investigation, which has sent shockwaves through the City, comes after the FSA this month secured its most high-profile criminal conviction in an insider dealing case against former Cazenove partner Malcolm Calvert.

Irwin Mitchell criminal fraud specialist Sarah Wallace told Legal Week: "This case has been in the pipeline for some time and appears to be the largest FSA insider dealing prosecution to date."

She added: "I suspect there will be other cases in the pipeline after the FSA set out in its business plan that it is going to be more aggressive in criminal investigations and increase its budget and recruitment of criminal prosecutors. This is part of a continuing agenda and we can expect more work for lawyers in this arena going forward."

Ashurst litigation partner Ed Sparrow commented: "Nobody can be surprised, as the FSA has been flagging for some considerable time that they are going to be more aggressive and insider dealing would be one of their targets."

The news comes as two former law firm partners accused last year of insider trading prepare for a hearing later this month (19 April). Former Dorsey & Whitney corporate partner Andrew Rimmington and former McDermott Will & Emery corporate partner Michael McFall will stand trial for insider trading along with Peter King, the former financial director of Neutec Pharma.

However, some have interpreted the tougher stance from the FSA as an attempt to head off its own abolition with the Conservative Party last year pledging to hand the bulk of its powers to the Bank of England if it won this year's general election.