Insider dealer Calvert freed after just seven months

Malcolm Calvert, the former Cazenove banker jailed in March as part of the Financial Services Authority's crackdown on insider dealing, was released yesterday after serving just a third of his 21-month sentence.

The former equity market-maker at the City firm, known as The Queen's banker, was categorised as a low-risk, category D prisoner.

He was convicted on five counts of insider dealing at Southwark Crown Court in March when the FSA hailed the decision as evidence that its much publicised clean-up of illegal practices in the City was yielding results.

But City lawyers criticised the decision to release Calvert yesterday, arguing that it gave the impression that insider trading was not being treated seriously by the prison authorities.

Dan Hyde, a white collar crime specialist at Cubism Law, said: "The FSA has no control over sentencing or over when someone convicted of insider trading will be released, but all the same, after just seven months it does give the impression that the authorities are not being that tough on City crimes."He added: "A few months ago, when the FSA was fighting for its existence, there was a stream of cases like this. Now the FSA is to disappear, there seem to be fewer cases – it seems to have taken its foot off the pedal."

An FSA spokesman denied that it was now less focused on white collar crime, adding: "The sentence was not light: Calvert was fined £500,000, banned from trading for life and his reputation has been left in ruins."

"There will also be further cases down the line – as we stand, there are currently 14 people with court dates for insider trading offences."

The case centred on information passed to a friend of Calvert who invested £1.3m in a company, making a profit of £280,000. Two-thirds of the profits were then passed to Calvert. His money was stuffed in envelopes and left with a racecourse bookmaker.

The maximum sentence for insider trading is seven years.