City watchdog may investigate Jeremy Hunt office leaks to Murdoch It is the case that in theory, if you pass inside information on a trading company you're potentially committing an offence. I think they probably will look at it. He claimed it would be more likely that the watchdog took action against the special adviser, Mr Smith, or the lobbyist, Mr Michel, themselves rather than their employers. The former FSA executive said that their defence could be that it is not unreasonable for a Government official to forewarn a major company about an announcement that will affect its business. Another source suggested that News Corp itself should have immediately made public the information it received from the Government. Unlike other authorities, the FSA does not require a formal complaint to be made before it begins investigating a potential breach of its rules. Any investigation would be carried out under the highly complex guidelines on market abuse, a civil offence carrying an unlimited fine as punishment, rather than the crime of insider trading. Under the Financial Services and Markets Act 2000, it is an offence to disclose inside information - precise and little-known details about companies that could affect their share price - to someone else "other than in the proper course of their employment, profession or duties." It does not require that the person receiving the information bought or sold shares on the back of it. But the FSA is likely to undertake a detailed analysis of the case before deciding to embark on a high-profile prosecution of a Whitehall official or the Murdoch empire. Sources said under some circumstances it could be legitimate for information about the Ofcom announcement to be passed between the parties, particularly if they had a confidentiality agreement. Mr Smith and Mr Michel had been the main "points of contact" between the Government and News Corp last year as the media giant sought to take over BSkyB, a bid it only abandoned as the phone-hacking scandal deepened. On January 24, 2011, Mr Michel sent a number of emails marked "confidential" to colleagues about what the Culture Secretary was due to announce the following morning, when Mr Hunt published Ofcom's report on the takeover that recommended it be referred to the Competition Commission. At 3.21pm, Mr Michel wrote: "Managed to get some infos on the plans for tomorrow [although absolutely illegal..>!]" He said that the press statement would be published at 7.30am the following day followed by one in Parliament two hours later, as did indeed happen. The FSA declined to comment. Review to define rules Whitehall officials have been told to "clarify" the rules around quasi-judicial decisions made by ministers. Allegations that Jeremy Hunt, the Culture Secretary, improperly shared information about the BSkyB takeover with News Corporation, have focused attention on his "quasi-judicial" role in the case. The term has been widely used by Mr Hunt to suggest his decisions in relation to Rupert Murdoch's business had a special status. However, there is no common legal definition of the phrase, leading some experts to claim it is unclear whether Mr Hunt broke any rules. David Cameron has asked Sir Jeremy Heywood, the Cabinet Secretary, to review the rules for ministers taking decisions on takeovers or other regulatory matters. Mr Cameron's spokesman suggested that "quasi-judicial" was defined by a "principle" of fairness rather than clear rules.