Insider dealers ordered to pay £3.2m in confiscation

In a case brought by the Financial Conduct Authority (FCA) and heard at Southwark Crown Court Confiscation Orders (the Orders) totalling £3,249,488.71 were made by His Honour Judge Pegden QC between 10 September 2014 and 15 September 2014 against Ali Mustafa, Pardip Saini, Paresh Shah, Neten Shah, Bijal Shah, Truptesh Patel and Richard Joseph.

On 27 July 2012 Ali Mustafa, Pardip Saini and Paresh Shah were sentenced to 3 years 6 months imprisonment, Neten Shah was sentenced to 18 months, and Bijal Shah and Truptesh Patel were sentenced to 2 years for offences relating to Insider Dealing contrary to Part V of the Criminal Justice Act 1993. These defendants were convicted of making a combined profit of £732,044.59 on trading between 1 May 2006 and 31 May 2008.

On 29 March 2013 Richard Joseph was sentenced to 4 years imprisonment for Insider Dealing offences. Mr Joseph’s trading resulted in a net profit of £591,117 on trading between September 2007 and July 2008.

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, (see note 7 below) to assume that the profits from other trading that took place within the same period represent the proceeds of crime.

In addition, Richard Joseph and Neten Shah were also ordered to pay a costs order of £200,000 and £100,000 respectively.

Tracey McDermott, director of Enforcement and Financial Crime said:

“The FCA has made it clear that we will use all of the tools at our disposal to ensure that our markets are clean. These individuals 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.”

The following Orders were made and must be paid over the course of the next 6 months:

Defendant Confiscation Order amount Time to be served in default of payment
Ali Mustafa £9,950.00 3 months
Pardip Saini £464,564.91 3 years
Paresh Shah £337,050.47 3 years
Neten Shah £125,726.13 2 years
Bijal Shah £137,995.00 2 years
Truptesh Patel £4,010.80 3 months
Richard Joseph £2,170,191.40 6 years

 

Notes for editors

  1. Press release following sentencing
  2. The FCA, and previously the Financial Services Authority, have secured 24 convictions in relation to insider dealing: Christopher McQuoid and James William Melbourne in March 2009; Matthew and Neel Uberoi in November 2009, Malcolm Calvert on 11 March 2010, Anjam Ahmad on 22 June 2010, Neil Rollins on 21 January 2011, Christian Littlewood and Angie Littlewood on 8 October 2010 and Helmy Omar Sa'aid on 10 January 2011, Rupinder Sidhu on 15 December, and James and Miranda Sanders together with James Swallow in May 2012 and Ali Mustafa, Pardip Saini, Paresh Shah, Neten Shah, Bijal Shah and Truptesh Patel on 27 July 2012, Thomas Ammann on the 13 December 2012, Paul Milsom on 7 March 2013, Richard Joseph on the 11 March 2013 and Graeme Shelley on 27 March 2014.
  3. The FCA is currently prosecuting eight other individuals for insider dealing:
    Individual Trial date
    Martyn Dodgson 11 January 2016
    Andrew Hind 11 January 2016
    Benjamin Anderson 11 January 2016
    Iraj Parvizi 11 January 2016
    Richard Baldwin 11 January 2016
    Grant Harrison 11 January 2016
    Julian Rifat Trial date to be confirmed
    Damian Clarke Trial date to be confirmed

  4. The Financial Services and Markets Act 2000 gives the FCA powers to investigate and prosecute insider dealing, defined by The Criminal Justice Act 1993.
  5. Individuals with information about market abuse can call the FCA’s market abuse hotline on 020 7066 4900.
  6. On the 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
  7. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
  8. Pardip Saini, Paresh Shah, Bijal Shah, Truptesh Patel and Richard Joseph were found to have a criminal lifestyle, as defined under the Proceeds of Crime Act 2002.
  9. Find out more information about the FCA.