March 13, 2013

Spread Betting Used to Act on Inside Information – Trader Prosecuted By FSA

The Financial Services Authority has brought charges in the UK against an individual for acting upon inside information and generating a net profit of £591,117 from trading between September 2007 and July 2008.

43 year old Richard Joseph has been found guilty of 6 counts of conspiracy to deal as an insider. He has been sentenced to four years on each count, which will be served concurrently.

Joseph, a former futures trader, was provided with confidential and price-sensitive information from two investment banks concerning proposed or forthcoming takeover bids. The confidential and price-sensitive information was provided to Richard Joseph by Ersin Mustafa, a print room manager at JP Morgan Cazenove. During the time that he was trading Richard Joseph transferred a substantial amount of money to Ersin Mustafa.

Attempts were made to disguise the receipt of this information including the use of numerous Pay As You Go mobile telephones – one of which was purchased using a false name and address – and webmail “drop boxes” where confidential documents containing price-sensitive information were placed for Joseph to access. Having received this information, Joseph then placed spread bets in the expectation that when the information became public knowledge the share price would rise and he would make a profit.

Ersin Mustafa, who is believed to be in north Cyprus, was also a source of inside information in the prosecution of Ali Mustafa, Pardip Saini, Paresh Shah, Neten Shah, Bijal Shah and Truptesh Patel who were convicted and sentenced in July 2012. The link between these two cases could not be published before now.

The Financial Services Authority has brought charges in the UK against an individual for acting upon inside information and generating a net profit of £591,117 from trading between September 2007 and July 2008.

43 year old Richard Joseph has been found guilty of 6 counts of conspiracy to deal as an insider. He has been sentenced to four years on each count, which will be served concurrently.

Joseph, a former futures trader, was provided with confidential and price-sensitive information from two investment banks concerning proposed or forthcoming takeover bids. The confidential and price-sensitive information was provided to Richard Joseph by Ersin Mustafa, a print room manager at JP Morgan Cazenove. During the time that he was trading Richard Joseph transferred a substantial amount of money to Ersin Mustafa.

Attempts were made to disguise the receipt of this information including the use of numerous Pay As You Go mobile telephones – one of which was purchased using a false name and address – and webmail “drop boxes” where confidential documents containing price-sensitive information were placed for Joseph to access. Having received this information, Joseph then placed spread bets in the expectation that when the information became public knowledge the share price would rise and he would make a profit.

Ersin Mustafa, who is believed to be in north Cyprus, was also a source of inside information in the prosecution of Ali Mustafa, Pardip Saini, Paresh Shah, Neten Shah, Bijal Shah and Truptesh Patel who were convicted and sentenced in July 2012. The link between these two cases could not be published before now.

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