Richard Joseph was provided with confidential, price sensitive information from two investment banks relating to proposed or forthcoming takeover bids by print room manager Ersin Mustafa at JP Morgan Cazenove.
Joseph used pay as you go mobiles and webmail drop boxes to receive the information, before placing spread bets in the expectation that the prices would rise once the information became public knowledge. He made a net profit of £591,117, some of which was transferred to Mustafa.
This is the second time Mustafa has been implicated as a source of information, having been involved in information dissemination in a case involving a team of five IFAs and a chartered accountant who were jailed for a combined 16 years last summer. Mustafa is said to have fled to north Cyprus.
Trial judge, His Honour Judge Pegden, said: “It is plain to me that you knew precisely what you were doing. This was carefully planned and much discussed between you; before, during and after the trades. This was not isolated criminal behaviour.”
Regulator’s warning
The Judge also said that there was a need for an element of deterrence when sentencing the case, because it is difficult and time consuming to detect this type of behaviour.
Tracey McDermott, director of enforcement and financial crime at the FSA, said: ““This conviction once again underscores our determination to take the strongest possible action against anyone involved in insider dealing. Joseph embarked on a sophisticated scheme which was designed to enable him to profit from exploiting confidential price sensitive information and at the expense of other market users. In less than a year his criminal conduct netted him sums of money most people can only dream of. For a time he no doubt thought this was easy money.This verdict should send a clear message about the consequences to anyone else who might be tempted to do the same.”
Joseph is the second trader to be convicted of insider trading this month. Last week, Paul Milsom, a former Legal and General equities trader, was jailed for two years for disclosing details of forthcoming securities transactions.
