Cazenove executive convicted for insider trading
A former executive of Cazenove has been convicted of insider trading and will appear in the court today where his sentence will be announced.
Malcolm Calvert the 65 year old former head of market marking at the company was found to be using leaked confidential information relating to various takeovers. He used this information in trading to earn profits.
Financial regulator, the Financial Services Authority (FSA) has indicated that it has stepped up efforts to safeguard the system and people should take the authority very seriously. The conviction is an achievement for the FSA as it shows that the authority is capable to catching financial crimes which escaped scout free in the past.
"In the past people thought they could get away with crimes like this. What is important is that there was a feeling in the market that it was impossible to get convictions for insider trading. We have proved that isn't right," said Margaret Cole, director of enforcement and financial crime at the FSA.
The Southwark Crown Court has convicted Mr. Calvert on five out of 12 counts for insider trading as he used information provided to him by a friend who worked at the company. He faces up to seven years in prison after a jury returned a guilty verdict following 18 hours of deliberations.
He invested about £502,143 in three companies for which Cazenove was preparing bids. He along with Bertie Hatcher earned £103,588 by trading the shares of biotechnology company Vernalis, engineering company Johnston Group and water supplier South Staffordshire.
The FSA has imposed a fine of £56,098 on Mr. Hatcher who did not attend the court hearing on medical grounds. According to his statement to the FSA, he has invested £1.3m in six companies between 2003 and 2005. This returned a profit of £280,000 out which about two third was transferred to Mr. Calvert.
The investigations did not lead to the conviction of any of the employees of the company. Additionally, FSA did not find any lapse of security systems during the fours years of investigations it conducted into Calvert's trading activities.
