February 17, 2010 7:23 pm

Insider trading trial hears of mystery source

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The alleged mystery source at the centre of an insider trading trial may have an employee of Cazenove bank who then moved on to the horse racing circuit, a court was told on Wednesday.

Bertie Hatcher, a retired betting shop manager and insurance broker, said he had received share tips from his friend Malcolm Calvert, a former Cazenove partner, on six different companies over two years, earning the pair £280,000 profit.

In written evidence read out to the jury at Southwark crown court by the prosecuting barrister Peter Carter QC, Mr Hatcher suggested the tips passed on by Mr Calvert may have come from a source at the bank who may have left between 2000 and 2003. Earlier in the week, Mr Carter told the court the Financial Services Authority had not been able to confirm the identity of that source.

Mr Hatcher’s statement was taken under oath in January 2008. He was unable to testify in person, however, because of the onset of dementia.

In the statement, he said Mr Calvert, whom he first met at the races, suggested he buy shares in six different companies, including Macdonald Hotels and the motoring organisation RAC. Mr Hatcher said he sold the shares for substantial profit, two-thirds of which he then paid to Mr Calvert in cash, on one occasion leaving the money with a bookmaker the two parties trusted.

Several of the companies in question were undergoing ownership changes, Mr Hatcher said, whether through a management buyout, a takeover or a merger. He admitted he had “very little knowledge of what [the companies] did”.

Mr Calvert denies the allegations, which are the most high profile in a string of insider dealing prosecutions brought by the FSA to combat an apparently rife problem. The regulator has not taken any action against Cazenove, now owned by JPMorgan.

The case continues.

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