Deutche Bank's Former Banker and Accountant Found Guilty in Insider Trading Case
May 10, 2016 09:57 AM EDT
A judge at Southwark Crown Court has condemned a former corporate banker of Deutsche Bank Martyn Dodgson and accountant Andrew Hind for insider trading crime, the largest in the history of the UK stock trading cases. However, three others including the ex- broker at Panmure Gordon Andrew Harrison and day traders like Iraj Parvizi and Benjamin Anderson were acquitted.
The trail that lasted for four months concluded a nine-year lengthy investigation, which was led by Financial Services Authority and its follower Financial Conduct Authority. The lawyers of FCA alleged Dodgson for conveying the details to Hind, who passed it down to the traders. During the court trial, it was said that the members would gather in an Indian restaurant to swap cash envelopes continuously, which totalled around GBP 7.4 million, as per the lawyers' calculation, as reported by The Telegraph.
The members also used monikers like Nobu, Fruit, and Fatty in their conversations in order to conceal their identities. The lawyers also accused the team of operating high-level encryption structure as well as unregistered pay-as-you-go cell phones to hide their movement. The investigators miked up Anderson's office in 2008 in order to record a discussion with Parvizi, who revealed the names of Hind and Dodgson.
Prosecutors said that the team exploited insider knowledge to transact on shares in Paragon Group, Scottish & Newcastle, Legal & General, BskyB and Just Retirement. Each member of the accused team got a huge trading success in the deal. In his career, Dodgson worked at various investment banks like Lehman Brothers and Morgan Stanley, while Hind worked as financial director at Topshop and as an advisor to Arcadia's chief Sir Philip Green.
Mr.Parvizi, who once employed in a kebab shop, went on to gain GBP 70 million from day trading. Mark Steward, enforcement chief, explained the complexity of the case. He said that FCA will not allow classy rapacious criminals misusing stock markets.
According to FINANCIAL TIMES, the offenders could be sentenced at least seven years imprisonment as it is the maximum punishment in the insider trading crime case. Anderson, Dodgson, and Parvizi were the first to be arrested in March 2010. The inquiry has already produced three remorseful pleas in different strands of the investigation. Among them are ex-equity trader at Moore Capital Julian Rifat and a previous broker at Novum Securities Graeme Shelley.
Business Matters quoted Elly Proudlock, counsel in WilmerHale, who said, "Although only a partial success, [yesterday's] convictions will be a relief for the FCA which had staked its reputation as a criminal prosecutor on the outcome of this case." The FCA disclosed that Hind and Dodgson were close friends and prompted this insider dealing scheme.
The investigation that was named Tabernula was the most difficult inquiry in the history of the UK insider trading criminal cases, which previously involved pensioners and interns.