Six people have been convicted of participating in an insider dealing ring that generated more than £700,000, in a case brought by the Financial Services Authority (FSA).
The six men obtained confidential information from the London print rooms of UBS and JP Morgan Cazenove on company takeovers, it was revealed during a four and a half month trial at Southwark Crown Court.
The gang was able to use sensitive information leaked from the print rooms of the two investment banks to put trades on companies before takeover bids were made public. This helped them make share gains worth hundreds of thousands of pounds.
The men used this information to place spread bets generating £732,000 between 2006 and 2008, the court heard.
Ali Mustafa, Pardip Saini, Paresh Shah, Neten Shah, Bijal Shah, and Truptesh Patel will be sentenced on Friday.
The men were convicted of offences relating to the obtaining and trading on information on six firms including Reuters, Premier Oil, Vega Group, Enodis and Thus.
A seventh man, stockbroker Mitesh Shah, was cleared of wrongdoing by the jury.
In the FSA’s longest and most complex prosecution to date, it sifted through hundreds of trading accounts and phone records to build a picture of the insider dealing ring.
The FSA started investigating the case in 2006 when it began to notice suspicios trades but could not link then to traders.
Due to the complexity of the case the FSA was asked not to investigate charges involving other companies’ shares which took the total potential gains to £2.25m.
Tracey McDermott, acting director of enforcement and financial crime at the FSA, said: “This sort of behaviour poses a significant risk to the integrity of markets and cheats honest investors.
“Our success in bringing these individuals to justice is the result of innovative and determined work done across our markets, intelligence and enforcement teams over several years.”
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