Three people have pleaded guilty to insider dealing in a prosecution brought by the FSA.
James Sanders, a director of Blue Index, a specialist Contract for Difference brokerage, previously pleaded guilty to 10 charges of insider dealing while wife Miranda pleaded guilty to five charges and co-director James Swallow pleaded guilty to three charges of insider dealing.
Christopher Hossain, a former trader at Blue index and former employee Adam Buck were acquitted in the trial heard at Southwark Crown Court today.
The ‘insider’ was Arnold McClellan who passed information to James and Miranda Sanders about a number of mergers and acquisitions on the NYSE and NASDAQ exchanges. The pair used the information to commit insider dealing as well as disclosing information to others including James Swallow. Total profits generated by the trio were around £1.9m while Blue Index clients made approximately £10.2m.
McClellan, who was a senior partner in a large US accounting firm, was an ‘insider’ to a number of mergers and acquisitions in US securities listed on the NYSE and NASDAQ exchanges.
FSA acting director of enforcement and financial crime division Tracey McDermott says: “Sanders and Swallow abused their position as approved persons. They used Blue Index, an authorised firm, as a vehicle for their criminal conduct and cynically exploited the inside information they had illegally obtained to try and improve its reputation and profitability for their own benefit.
They will be sentenced on June 19.