Insider-dealing ring at UBS and JP Morgan facing jail

Six men were facing jail terms yesterday after being found guilty by a jury of insider dealing in a ring where employees in the print rooms at UBS and JP Morgan passed on secret takeover deal documents to their trader friends.

Brothers Ersin and Ali Mustafa passed on confidential and price-sensitive information from their printing work, downloading confidential information onto memory sticks for friends who used the information to make spread bets on share prices of the companies involved.

The men made their bets knowing the share prices would rise when the stolen information was made public.

The four-and-a half-month trialwas the longest and most complex prosecution brought by the Financial Services Authority (FSA), involving evidence from hundreds of trading accounts and telephone records.

The men were convicted of making a profit of £732,044 over a two-year period from May 2006. The FSA had prepared further charges but the judge ruled they should not be heard for trial-management reasons – effectively to save the public money on an even longer hearing.

Most of the men's trading was done through the City Index spread-betting house, often in the names of friends and family in the hope of disguising the suspicious activity.

During the trial, Ali, who worked at UBS, described his older brother, Ersin, as "a wheeler dealer … always looking for the extra buck".

Ersin, who was at JP Morgan, is currently believed to be in North Cyprus, where the brothers have family.

Ali originally tried to blame other colleagues in the UBS print room but analysis of his computer proved he was definitely the culprit.

Tracey McDermott, the acting director of enforcement and financial crime at the FSA, said: "The defendants were involved in a long-running, sophisticated and very profitable scheme. Indeed, several of them derived the majority of their income from it... This sort of behaviour poses a significant risk to the integrity of markets and cheats honest investors."

Ali faces up to seven years in jail when he is sentenced this Friday.

The other men involved, who are also potentially facing seven-year jail sentences, were Pardip Saini, former investment adviser Paresh Shah, Neten Shah, Bijal Shah and Truptesh Patel.

A seventh man, Mitesh Shah, who worked for the Worldspreads spread-betting firm, was acquitted.