LONDON—A jury here acquitted two men charged with insider trading, dealing a blow to the U.K. Financial Services Authority as it strives to showcase a new tough-on-crime persona.

The FSA had charged Peter Andrew King and Michael McFall with insider trading in advance of a June 2006 pharmaceuticals deal, but the London jury on Thursday delivered a not-guilty verdict in less than two hours.

The acquittals overshadowed the FSA's announcement earlier in the day that it had slapped a J.P. Morgan Chase & Co. unit with a £33.32 million ($48.7 million) penalty, the regulator's largest-ever fine, for failing to separate client money from the firm's accounts. The FSA said it expected to bring similar cases against other banks in coming weeks.

After years of rarely filing criminal charges, the agency once derided for being a toothless regulator of The City of London has revved up its law-enforcement efforts with a recent flurry of arrests, police raids, criminal charges and other headline-grabbing actions. But the FSA has successfully prosecuted only a handful of criminal cases, mostly against small-time offenders, and it is under pressure to show that it can win a major case.