Six members of an insider dealing ring, including a former IFA, have been jailed in what the FSA says is its longest and most complex prosecution to date.
The FSA announced that Ali Mustafa, Pardip Saini, Paresh Shah, Neten Shah, Bijal Shah and Truptesh Patel were convicted of insider dealing offences earlier this week following a four and half month trial at Southwark Crown Court.
The FSA register shows Paresh Shah was an adviser with Potters Bar based firm Elite Financial Planning Services between December 2001 and August 2008. His permissions also list Sesame and DBS Financial Management. He mainly gave advice on pensions and mortgages.
Mustafa, Saini and Shah were sentenced today to three years and six months, Neten Shah was sentenced to 18 months, Bijal Shah and Patel were sentenced to two years. Confiscation and costs orders will be dealt with at a later date.
The defendants made a combined profit of over £732,000 on trading between 1 May, 2006 and 31 May, 2008 by obtaining confidential and price-sensitive information from investment banks relating to proposed or forthcoming takeover bids. They then used a large number of accounts to place spread bets ahead of those announcements knowing when the information was made public the price would rise.
In bringing the case, the FSA had to examine hundreds of trading accounts and telephone records to build up a picture of the timing and degree of contact between those in the insider dealing ring.
In passing sentence Mr Justice Pegden QC said: “The insider dealing in this case was not isolated criminal behaviour. The meticulous and exhaustive FSA inquiry has revealed exactly how your cheating was perpetrated.”
FSA acting director of enforcement and crime Tracey McDermott says: “This investigation and these sentences should send a clear message to anyone else who might be tempted to do the same. Insider dealers are criminals, no more and no less, and we are committed to using all the tools at our disposal to bring them to justice.”