Senior investment banker Martyn Dodgson and Chartered accountant Andrew Hind have been sentenced at Southwark Crown Court to four-and-a-half years and three-and-a-half years imprisonment, respectively.
Earlier this week, the pair were found guilty, following a three-month trial, of conspiring in insider dealing between November 2006 and March 2010.
Dodgson’s sentence is the longest ever handed down for insider dealing in a case brought by the Financial Conduct Authority, which added that confiscation proceedings will also be pursued against both defendants.
His Honour Judge Pegden, remarked that their offending was “persistent, prolonged, deliberate, dishonest behaviour”.
Dodgson worked at Morgan Stanley as a vice president in global capital markets until January 2007, then at Lehman Brothers as an executive director in the European investment banking division from July 2007 to September 2008, ending up at Deutsche Bank in October 2008 as a director in the corporate broking department and later as managing director.
Hind was a businessman, a property developer and a qualified Chartered accountant, who used Dodgson’s inside information of deals secretly on their behalf.
The dealing related to Scottish & Newcastle in October 2007; the Paragon Group of Companies in July 2008; Just Retirement in October 2008; Legal & General in February 2009; and BSkyB in March 2010.
Mark Steward, the FCA’s director of enforcement and market oversight, said Dodgson was an approved person who was entrusted by his employer with sensitive and valuable information.
He said: “He betrayed that trust by exploiting the information for his own benefit, conspiring with Hind to deceive the market.”
Oliver Higgins, National Crime Agency branch commander, said: “Dodgson and Hind tried to prevent us from uncovering their insider dealing by using unregistered mobile phones, encoded and encrypted records, and transferring benefit using cash and payments in kind.
“The NCA were able to support the FCA by carrying out surveillance and providing niche capabilities, including the deployment and monitoring of a listening device that recorded key conversations.”
The FCA’s Operation Tabernula was conducted in partnership with the National Crime Agency and took on forensic accountants, lawyers, markets experts, intelligence analysts and digital forensic specialists to unravel the conspiracy.