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.

The FCA had tried to convince a jury that the messages were destroyed because they would be relevant to his investigation. 

Vishnyak argued: “I wasn’t thinking about that. I was deleting my private information. This has nothing to do with shares.”

Vishnyak’s lawyer said that the chats contained embarrassing information between him and Andrei Lugovoi, a politician who is currently wanted by British authorities for poisoning former Russian security officer Alexander Litvinenko in 2006.

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The FCA says the ruling will have no impact on how it conducts investigations. “We will take action whenever evidence we need is tampered with or destroyed,” the agency commented in a statement. 

Neil Swift, a white collar-crime lawyer at Peters and Peters, said the agency needs more than just the simple fact of deletion to prove its case that evidence was deleted related to the investigation: “There will be other cases where it’s not so clear cut, but having chosen this particular case to pursue, it does leave them with a little bit of egg on their face.”

Via Zerohedge