* Trader among five arrested in latest swoop
* Schroders says employee acted alone, no impact on clients
* Five expected to be released on bail
By Kirstin Ridley and Sinead Cruise
LONDON, Jan 22 (Reuters) - British police have arrested atrader at asset manager Schroders and four other men andwomen in the latest swoop on suspected insider dealing as partof a regulatory crackdown on market abuse.
The Financial Services Authority (FSA) said on Tuesday twomen, aged 37 and 62, and three women, aged 39, 51 and 63, werebeing questioned after police and prosecutors searched fourproperties in London and other parts of England.
The five, who have not been charged, were expected to bereleased on bail later on Tuesday.
The FSA's head of enforcement Tracey McDermott has vowed tocontinue efforts to stamp out market abuse that began in earnestunder her predecessor Margaret Cole.
The watchdog, which in April will be rolled into a new bodycalled the Financial Conduct Authority, has been criticised fora "light touch" style of regulation which was exposed asinadequate by the financial crisis and has since around 2007pursued more individuals with criminal sanctions and leviedstiffer fines.
One source familiar with the latest investigation said onlyone of the five arrested was a London-based financialprofessional. Schroders confirmed one employee had been arrestedand was immediately suspended. It declined to identify him.
"The FSA has informed us that the allegations relateentirely to this individual's personal actions," a spokeswomansaid. "Schroders is not subject to any investigation. There isno indication of any detrimental impact on our clients orfinancial results."
A second source familiar with the matter confirmed theemployee worked in the investment management division of thegroup and not its private banking arm.
The FSA said the latest arrests were not linked to any otherinsider dealing investigation.
Britain's top financial regulator is prosecuting six othersfor insider dealing and has secured 21 convictions for theoffence, which can carry a jail sentence of up to seven years.
Its highest-profile insider dealing investigation to datestems from a swoop in March 2010 that originally led to sevenmen being arrested, including employees of institutions such asDeutsche Bank and Moore Capital, in a series of dawnraids in an operation codenamed Tabernula.
Another three individuals were later arrested as part of thesame operation, although only seven have been charged so far.
One of them - Paul Milsom, a former equities sales trader atthe investment arm of Legal & General - indicated at apre-trial hearing last week that he would plead guilty to onecount of insider dealing.