The former star fund manager, who ran a number of UK equity funds for the global asset management house, resigned from his role at the group in March.

According to a Sky News report Lyttleton – who officially left BlackRock at the end of March – was detained by the City of London Police on 30 April as part of a market abuse probe launched by the Financial Conduct Authority (FCA).

Lyttleton (pictured) is one of the most high-profile City professionals targeted since the regulator embarked on a crackdown on the financial services industry in the aftermath of the banking crisis.

The manager left BlackRock after more than a decade at the firm running money, having built up a formidable reputation at the height of his career in the late 2000s.

At that time Lyttleton was running a large range of portfolios, including the BlackRock UK, UK Dynamic, and UK Absolute Alpha funds.

But a downturn in performance meant all three funds began to struggle during the latter years of the manager’s tenure.

Last summer Lyttleton took a three-month break from the industry for family reasons, returning to his post in September 2012.

BlackRock said in a statement issued to Your Money’s sister title Investment Week: “On Tuesday 30 April, an individual, who previously worked at BlackRock, was arrested by the City of London Police on suspicion of insider dealing.”

“The FCA has informed us that the allegations relate to actions carried out for personal gain, while off our premises, and that neither BlackRock, nor any other employee, is under investigation.

“There is no suggestion that there has been any impact to any of BlackRock’s clients.

“The alleged behaviour is totally contrary to the firm’s principles and values.

“BlackRock strongly supports aggressive enforcement of the law in these matters. The firm has been aiding and will continue to aid the authorities with their investigations.”

The details of the allegations against Lyttleton are unclear, though Sky News highlighted the FCA’s 3 May announcement that a man aged 41 and a woman aged 37 had been arrested in an insider dealing investigation.

“No further details can be confirmed at this time and no individuals have been charged,” the FCA said on 3 May in a statement relating to those arrests.

“The arrests are not linked to any other ongoing insider dealing investigations.

“Business and private premises in Switzerland were also searched by the Swiss authorities in connection with the FCA’s investigation.”