UK bank reports of suspicious transactions surge - report

LONDON (Reuters) - Banks in Britain have reported almost 1,200 suspicious transactions to the regulator over the last 12 months - 250 percent more than five years ago - as the watchdog steps up pressure on a scandal-hit industry to get its house in order.

Financial institutions are reporting 100 instances of possible market abuse to the Financial Conduct Authority (FCA) per month - up from 28 five years ago, according to data published on Tuesday by UK law firm Pinsent Masons after a Freedom of Information request.

Banks have been required to notify the regulator of suspicious transactions - where there are reasonable grounds to suspect market abuse such as insider dealing - since the Market Abuse Directive (MAD) was introduced in 2005.

But a string of scandals from benchmark rate-rigging scams to mis-selling payment protection insurance and misleading customers about hedging products, and further hefty fines on the horizon, means banks are keen to show controls are secure.

Monica Gogna, a partner at Pinsent Masons, said the fear of fines and criminal prosecutions ran deep in the industry and was making people "think twice" about turning a blind eye to suspicions.

"City enforcers have homed in on market abuse by financial services professionals and have made it quite clear that non compliance and criminal behaviour won't be tolerated," she said. "The casual sharing of confidential information that was once rife in London is now riskier than ever before."

The FCA has secured 23 convictions for market abuse and insider dealing since 2009, with seven currently awaiting trial. Insider dealing is a criminal offence in England that is punishable by a fine or up to seven years in jail. (Reporting by Kirstin Ridley; editing by David Evans)