British Trade Agency Probes Its Own Staff

LONDON —  The British government said Thursday that employees of its own financial watchdog department were being investigated for possible illegal insider stock trading.

The Department of Trade and Industry said two investigators had been appointed to look into the possible abuses by employees of the department itself, the Office of Fair Trading and the Monopolies and Merger Commission.

The opposition Labor Party said the news gave dramatic support to its demand that Britain should have a financial regulator independent of both government and the stock market.

Insider trading--the use of privileged information to make a profit from share dealing--is illegal in Britain, as it is in the United States.

“Inquiries into insider dealing are becoming a habit,” Labor’s trade and industry spokesman Robin Cook said.

“There could be no clearer proof of our claim that insider trading is commonplace in financial markets. Now it is the government itself that is under scrutiny.”

Several investigations are going on in Britain, with some inquiries linked with disclosures in the United States after Wall Street financier Ivan F. Boesky last month paid a record $100 million to settle charges of insider trading brought by the Securities and Exchange Commission.

In another development, brewing giant Guinness said that in May, one of its subsidiaries joined a limited partnership managed by Boesky. Guinness stressed that it had done nothing wrong.