A former Deutsche Bank AG managing director and another man were found guilty of insider dealing following a four-month trial that focused on allegations that bankers at respected institutions gave traders tips that generated millions in illicit profits.
Martyn Dodgson, a former corporate broker at the lender, and accountant Andrew Hind were convicted by majority verdict in London Monday in what is considered the country’s biggest insider-trading case. Three other men were cleared following nine days of deliberations.
The UK Financial Conduct Authority, which brought the case, said Dodgson and another corporate broker gave information about deals to Hind, who passed it on to two day traders. The men were accused of making 7.4 million pounds (US$10.7 million) from trading six stocks including Sky Plc and Legal & General Group Plc.
Andrew “Grant” Harrison, a former broker at Panmure Gordon & Co, as well as day traders Benjamin Anderson and Iraj Parvizi, were acquitted.
The investigation dates back to 2007 and led to a series of dawn raids three years later that sent shock waves through London’s financial community. The arrests showed that the regulator, which had only brought its first insider-trading case in 2009, would take a tougher approach following the financial crisis.
The mixed verdicts may still be considered a victory for the FCA, with the regulator nabbing a banker at a high-profile lender. The results follow the FCA’s lead role in tackling market manipulation scandals including those involving the London interbank offered rate and foreign-currency exchange.
“After nine days of deliberation, the FCA will be breathing a huge sigh of relief,” said Jason Mansell, a trial lawyer at QEB Hollis Whiteman in London. “Now that the FX and Libor cases of recent years are coming to a close, once again insider dealing and market abuse is likely to be at the very top of the enforcement agenda.”