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January 15, 2013 9:06 pm
A former sales trader at Legal & General’s investment management arm and a broker are the latest defendants to face charges in the UK financial regulator’s biggest insider-trading investigation.
Paul Milsom and Graeme Shelley will make their first court appearance at Westminster magistrates' court on Wednesday as part of a criminal probe that accuses the pair of insider trading offences.
Mr Shelley, a former broker a Novum Securities, was one of seven suspects arrested in March 2010 after a series of dawn raids at the homes of employees of institutions including Deutsche Bank and Moore Capital.
The raids were conducted by the Financial Services Authority, with assistance from the Serious Organised Crime Agency, in an operation codenamed Tabernula, which is Latin for “little tavern”.
At least two further suspects have been arrested since then, including Mr Milsom in February of last year following dawn raids in Kent and London.
Five defendants have already been charged in connection with the probe, the FSA’s largest to date in terms of both the numbers of suspects and the amount of profit made by the alleged insider dealing. None of those defendants have formally entered a plea – their case continues with any trial not due to start until early 2014.
Neither Mr Milsom nor Mr Shelley will have to enter a plea on Wednesday, which is a preliminary hearing.
The FSA, like its US counterparts at the Department of Justice, are cracking down on the crime, which carries a maximum seven-year prison sentence. From a standing start in 2008, before which the FSA had never brought a criminal case of insider trading, the FSA has pursued charges arising out of nine separate investigations to date, not including Tabernula.
Mr Milsom, of Greenwich, London, is accused of “having information as an insider, disclosed that information, otherwise than in the proper performance of the functions of your employment, office or profession, to Graeme Shelley” between October 30 2008 and March 16 2010, according to the court list.
The document adds that Mr Shelley, of Amersham, Buckinghamshire, is accused of “having information as an insider, dealt in securities that were price-affected securities in relation to the information by acting as a professional intermediary” between October 30 and November 4 2008.
The FSA declined to comment. Corker Binning and BCL Burton Copeland, solicitors for Mr Milsom and Mr Shelley respectively, declined to comment.
An L&G spokesman referred to a statement released at the time of Mr Milsom’s arrest last year that said the alleged incidents did not harm the company’s clients or have an impact on its financial results.
Novum Securities did not immediately respond to a request seeking comment.
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