Fearing That Muck Will Stick

Britain's stock-trading scandal could produce a political backlash

Wall Street is not the only financial district with a horrendous image problem these days. The venerable collection of banks and investment houses known as the City of London is also embroiled in a shocking stock-trading scandal. Investigators are still probing deeply into allegations of wrongdoing surrounding the $4 billion takeover last year of Distillers, the British manufacturer of Johnnie Walker Scotch and Gordon's gin, by Guinness, the Anglo-Irish brewer and distiller. The sensational affair has already ruined the careers of some of Britain's best-known businessmen, and may bring regulatory retaliation on the City.

The scandal could also have serious political...

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