Two Convicted in the biggest Insider Trading Conspiracy in Britain 

A former investment banker and a businessman were convicted of insider trading on Monday in what the British authorities have described as the largest crackdown on improper trading in Britain.

After a three-month trial in Southwark Crown Court in London, Martyn Dodgson, a former banker at Morgan Stanley, Lehman Brothers and Deutsche Bank, and Andrew Hind, a businessman and trained accountant, were convicted of conspiracy to “insider deal,” as insider trading is described in Britain.

The conspiracy began in November 2006 and ended in March 2010, prosecutors said.

The case sprung out of an investigation called Operation Tabernula. The investigation began with a series of raids by the British authorities in March 2010

Three other men who also were on trial were acquitted of criminal charges on Monday.

“This was an extraordinary and complex case of a type not prosecuted in this country before,” Mark Steward, the Financial Conduct Authority’s director of enforcement and market oversight, said in a news release on Monday.

“The message is loud and clear that the F.C.A. will not tolerate sophisticated predatory criminals abusing our markets,” he added.

Sentencing of Mr. Dodgson, 44, and Mr. Hind, 56, will be at a later date. The maximum sentence for each is seven years in prison.

The Financial Conduct Authority accused Mr. Dodgson of improperly sharing information from the investment banks where he worked to be used to make improper trades.

Mr. Dodgson shared the information with Mr. Hind, his close friend, the regulator said. Mr. Hind acted as a middle man and helped facilitate trades for the benefit of Mr. Dodgson and himself, the Financial Conduct Authority said.

The members of the conspiracy used unregistered mobile telephones, encrypted records and safe deposit boxes to hide their improper trading from authorities, the Financial Conduct Authority said.

The tips included inside information about Paragon Group, Legal & General and BSkyB, the regulator said.

Five people in total have pleaded guilty or been convicted of criminal charges in the matter.

The other three, who pleaded guilty, are Julian Rifat, a former senior execution trader at Moore Capital Management; Graeme Shelley, a former broker at Novum Securities; and Paul Milsom, a former senior trader at Legal & General.

Source: NY Times

---