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Two convicted in largest-ever FCA insider dealing investigation

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A former investment banker and a chartered accountant have been convicted of insider dealing in the largest-ever investigation of its kind undertaken by the FCA.

The regulator relied on evidence including trades involving pension firms Just Retirement and Legal & General.

Martyn Dodgson, 44, formerly of Lehman Brothers, Morgan Stanley and Deutsche Bank, and Andrew Hind, 56, a qualified chartered accountant and property developer, await sentencing following a three-month trial at Southwark Crown Court.

Three other defendants, Andrew Grant Harrison, Ben Anderson and Iraj Parvizi, were acquitted.

Between December 2006 and March 2010, personal friends Dodgson and Hind used inside information sourced from Dodgson to effect secret dealing for their own benefit.

To prove the conspiracy, the FCA – who worked on the investigation with the National Crime Agency – relied on five acts of insider dealing at five companies: Scottish & Newcastle in October 2007, Paragon Group of Companies in July 2008, Just Retirement in October 2008, Legal & general in February 2009, and BSkyB in March 2010.

The investigation uncovered elaborate strategies used by Dodgson and Hind to cover up their activities. These included using unregistered mobile phones, encoded and encrypted records, safety deposit boxes and the transfer of benefit using cash and payments in kind.

In several cases Dodgson or his employer was advising or connected with the company traded or the corporate transaction.

Confiscation proceedings will also be pursued against both defendants.

The convictions are part of the FCA’s investigation Operation Tabernula which has seen the conviction of three others: Paul Milsom, Graeme Shelley and Julian Rifat.

FCA enforcement and oversight director Mark Steward says: “This was an extraordinary and complex case of a type not prosecuted in this country before. The message is loud and clear that the FCA will not tolerate sophisticated predatory criminals abusing our markets. This case demonstrates our capability and determination to root out this kind of abuse and ensure our market and the investing public are properly protected.”

He adds: “Dodgson was an experienced and well-paid banker, well aware that what he was doing constituted a criminal offence and who conspired with Hind to abuse our market and to profit at the expense of the investing public. The FCA is committed to detecting this kind of abuse and make the perpetrators fully accountable in accordance with the law.”

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  1. “The FCA is committed to detecting this kind of abuse and make the perpetrators fully accountable in accordance with the law.”

    Yes but it rarely achieves it, does it?
    Nevertheless, and particularly as insider dealing is one of the most difficult activities to prove, the FCA deserves some commendation in this case.

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