Malcolm Calvert, the former Cazenove banker convicted of insider dealing earlier this week, was today sentenced to 21 months in prison.
Calvert, known as Streaky because of his habit of racing around the trading floor as a junior trader, also faces a fine to recover the money he made after passing on price-sensitive information about companies to a friend, who then invested on his behalf.
Sentencing at Southwark Crown Court in London, judge Peter Testar said Calvert had committed a serious offence: “This offending isn’t victimless. It is the enrichment of a few at the expense of the public interest and the loss of confidence in a clear and fair market.” The maximum sentence for someone convicted of insider dealing is seven years.
Calvert, who joined the so-called Queen’s stockbroker in 1961, was convicted on five counts of insider dealing yesterday. The prosecution, which was brought by the Financial Services Authority, centred on information he passed to Bert Hatcher, a friend of Calvert’s, who invested £1.3m, returning a profit of £280,000. Two thirds of the profits were passed to Calvert, the prosecution claimed.
The guilty verdicts relate to Hatcher’s investment in three companies. On each occasion, the shares were bought just before price moving information came into the public domain. Calvert’s share of the proceeds was stuffed in envelopes stuffed and left with a racetrack bookmaker.
He was acquitted on seven further charges.
Calvert did not give evidence during his three-week hearing. Hatcher, who now suffers from dementia, provided written evidence two years ago. Hatcher has agreed to pay a £56,000 fine, and accept a ruling of market abuse in return for immunity from prosecution.
Calvert left Cazenove, which is now owned by the US investment banking giant JP Morgan, in 2000. The offences took place between 2003 and 2005, with the prosecution establishing that the information must have come from an employee of the bank.
JP Morgan issued a statement yesterday distancing itself from the case, adding that it has carried out an unsuccessful investigation into the source of the leaks.
It refused to give details of the investigation. White collar criminal law specialists said it was in the bank’s interest that the informant was not found.
“Without pinning down where Calvert got his information from, it is almost impossible to conduct a meaningful investigation into the bank’s behaviour,” said Dan Hyde, of Cubism Law.Reuse content