A group of seven men including one former IFA who were imprisoned in 2012 and 2013 for insider dealing have served with confiscation orders worth a combined £3.2m by the regulator, more than four times the combined profit made during the period covered by the offences.
In July 2012, Paresh Shah, a former IFA at North London-based Elite Financial Planning, Ali Mustafa and Pardip Saini were each sentenced to three and a half years in prison. Truptesh Patel and Bijal Shah were sentenced to two years in prison, while Neten Shah, a chartered accountant, was sentenced to 18 months in prison.
The six were convicted of making a combined profit of £732,044 on trading between 1 May 2006 and 31 May 2008.
On 29 March 2013, Richard Joseph was sentenced to four years imprisonment for insider dealing offences. His trading resulted in a net profit of £591,117 between September 2007 and July 2008.
This means the confiscation order amounts to close to two-and-a-half times the total profit made by the seven men of a little more than £1.3m.
The total amount confiscated exceeds the profits generated as a result of the application of the confiscation regime, which allows the court in appropriate cases to assume that the profits from other trading that took place within the same period represent the proceeds of crime.
During hearings last week at Southwark Crown Court, Judge Pegden handed out the confiscation orders, along with ordering Richard Joseph and Neten Shah to pay a costs order of £200,000 and £100,000 respectively.
Tracey McDermott, director of enforcement and financial crime for the FCA, said that the individuals were engaged in a sophisticated scheme to try and make easy money by exploiting inside information.
“As a result they have not only lost their liberty, their livelihoods and their reputations but they have also now been ordered to pay significant sums in confiscation. This should be a clear message to others that insider dealing does not pay.”
