A former senior investment banker, his wife and a family friend pleaded guilty yesterday to eight charges of insider trading.
The three are facing lengthy prison sentences in a case that will be seen as securing one of the biggest victories yet for the Financial Services Authority (FSA) in its crackdown on white-collar crime.
Christian Littlewood, a corporatefinance specialist who spent 10 years at Dresdner Bank before quitting in 2008 to work for Shore Capital, the London-based investment bank,admitted trading on inside information on a series of occasions between 2000 and 2008.
The offences came to an end only when City of London police arrested Littlewood, who is no longer employed by Shore Capital, and his wife Angie Littlewood, a non-practising barrister, in March 2009.
The third defendant in the case, Helmy Omar Sa'aid, a Singaporeannational, was extradited to the UK last year after being arrested on an international warrant by the French authorities in Mayotte, one of the Comoros Islands in the Indian Ocean.
The legal move was the first extradition sought in a British insider-dealing case.
Sa'aid, who was described at Southwark Crown Court in London as an "unemployed family friend of Mrs Littlewood", helped the couple trade shares in a string of companies, buying into them on behalf of the trio before the news of proposed takeovers, of which Mr Littlewood had privileged knowledge, was released to the stock market. The stocks, listed on the main market of the London Stock Exchange and the Alternative Investment Market, included Inspace, Highway Insurance, Bristol Water and Viridian, which soared in value once the takeover news became public.
The FSA said yesterday that itbelieved the three had made a £590,000 profit from trades based on the inside information, which would make the case the most serious it has prosecuted since bringing its first insider-dealing cases to court two years ago.
Judge Anthony Leonard has yet to schedule a sentencing hearing in the case, though Sa'aid's lawyer, David Gibson-Lee, yesterday suggested that immediate custodial sentences were inevitable. The offences carry a maximum jail sentence of seven years. In addition, Sa'aid faces deportation to Singapore, should he be sentenced to longer than a year in jail.
The case against the Littlewoods took former colleagues of the investment banker, described by the FSA as "the instigator" of the illegal activity, by surprise when details first emerged last year. One said: "Christian seemed the least likely person to do something like this. He was not a flamboyant character or a big ego banker – he was a bit grey."
Margaret Cole, the managing director of enforcement and financial crime at the FSA, said the regulator wasdetermined to continue its recent tougher focus on City crime.
The watchdog had been expected to lose its responsibilities for tacklinginsider dealing and other offences in the Government's shake-up of financial regulation, which is now nearing completion. However, the successes Ms Cole's unit has enjoyed in recent months appear to have prompted a rethink from ministers, who said before Christmas that financial crime would, after all, remain within the remit of the City regulator.
"These guilty pleas show that our strategy of a tough approach toinsider dealing – and in particular demonstrating that we are prepared to fight difficult criminal prosecutions to trial – is paying off," Ms Cole said. "Dedicated hard work, bold and innovative use of the tools at our disposal and close seamless co-operationbetween our markets, enforcement and intelligence functions underpin our successful track record in this complex area."
The case brings the number of insider dealing convictions secured by the FSA to seven in the past two years. They have included the conviction of Malcolm Calvert, a former Cazenove partner, who was sentenced to 21 months in prison in March last year for offences linked to illegal trades in the shares of three companies, which netted him and a friend £100,000.
In addition, a dozen more individuals face insider-dealing charges in two cases due to come to court this year.Reuse content