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Six members of insider dealing ring found guilty

FSA building 480

Six members of an insider dealing ring have been convicted following what the FSA has said is its longest and most complex prosecution to date.

Ali Mustafa, Pardip Saini, Paresh Shah, Neten Shah, Bijal Shah, and Truptesh Patel have been convicted of disclosing inside information and dealing on the basis of that information between 2006 and 2008.

The conviction follows a four and a half month trial at Southwark Crown Court. The defendants will be sentenced on July 27.

The defendants made a combined profit of over £732,000 on trading between May 1, 2006 and May 31, 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.

FSA acting director of enforcement and financial crime Tracey McDermott says: “The defendants were involved in a long running, sophisticated and very profitable scheme. Several of the defendants derived the majority of their income from the scheme. They took a number of steps to reduce the likelihood of detection and continued throughout the trial to deny any wrongdoing.

“Our success in bringing these individuals to justice is the result of innovative and determined work done across our markets, intelligence and enforcement teams over several years.”

Mitesh Shah was acquitted of insider dealing.

Since March 2009 the FSA has secured 14 insider dealing convictions, in addition to those announced today. The regulator is currently prosecuting four other individuals for insider dealing.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. How many more ……!

  2. after you read this article and the aspect of wrong doing by these people, they got the justice that they deserved on the principles that the FSA enforces for insider dealing, the four must however feel let down by the double standards that the FSA seems to take if you have a title that begins with Lord and if you take the same timescale that it happened in, Green was chief executive between 2003 and 2006 and executive chairman between 2006 and 2010, even though insider trading is a crime as dictated by the FSA, so is money laundering, punishable by a hefty fine and a possible period of inside living at her majesty’s pleasure, one must wonder why one gets away with his crime and these guys get hammered, FSA must be duly implicated in this some way because they are the ones that enforce the regulations on us, but turn a blind eye when it is one of their own titled fiends, rough diamond or not, every one sits in the same boat and when it is melt down the captains of this industry should not be found in the life boats, like the owners of the white satr line, but should be made to take the punishment that they meek out to others, it should not be deemed to be seen has having their cake and eating it. As a financial adviser, we were always led to believe in going that extra mile for our clients and for the long term not like these guys who were only it in to get their golden handshakes and golden parachutes with pensions attached, how much longer are the innocent going to suffer the incompetence of top management.

  3. In my mind this is the kind of work the FSA should be involved in!

  4. Did we bring them to justice for a cost of under £732,000 ???

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