This Monday saw two men, Martyn Dodgson and Andrew Hind found guilty of insider trading after a four month trial in what is Britain’s biggest ever insider trading case.
The four month trial ends a nine year-long investigation from the FCA dubbed operation Tabernula, which began in 2007 and involved trawling through thousands of records and wiretapping to build a case across the period. The operation culminated in dawn raids in March 2010 involving over 140 staff and 16 different locations.
Mr Dodgson is convicted of passing insider knowledge he gained while working as an investment banker with Deutsche bank to his friend Hinds an accountant, who acting as a middle man sent the insider info on to 3 securities traders. The 3 traders named in court as Julian Rifat, Graeme Shelley, Paul Milsom pleaded guilty in the case and have been acquitted.
The men were accused of making £7.4 million pounds ($10.7 million) from the insider trading of six stocks between the period of 2006 and 2010, with the FCA investigating them from 2007 on. The pair is said to have used high end encryption systems, pay as you go mobile phones and nicknames to keep their anonymity.
Dodgson and Hinds now face a maximum prison term of 7 years. The verdict is seen as a victory for the FCA as they look to send a message to other would be white collar criminals. Mark Steward a director of enforcement with the FCA had to say;
“The message is loud and clear that the F.C.A. will not tolerate sophisticated predatory criminals abusing our markets.”
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