LONDON |
LONDON (Reuters) - A British trader and his wife who helped fund a lavish lifestyle from illegal share dealing, were jailed on Wednesday in a landmark case pursued by prosecutors on both sides of the Atlantic.
James Sanders, who owned and was a director of now-defunct brokerage Blue Index, his wife Miranda and James Swallow, a Blue Index co-director, had last month pleaded guilty to a combined 18 counts of insider dealing between October 2006 and February 2008.
James Sanders, dubbed by Judge Peregrine Simon as "the driving force behind the criminality", was jailed for a record four years. Miranda Sanders - who was tipped off about imminent U.S. takeovers by her sister in America - was jailed for 10 months, as was Swallow.
The striking, sharply-dressed couple, who are both in their mid thirties and have two young children, saw their sentences cut by 25 percent after pleading guilty, although James initially argued his trades were legitimate stock picks.
They held hands while judge Peregrine Simon read out the case against them and kissed after sentencing. Miranda turned to smile and nod encouragingly at a woman in the court room's public gallery, who burst into tears on sentencing.
The Financial Services Authority (FSA), which brought the UK prosecution, said the three scooped almost 2.0 million pounds in profits from illegal share dealings, while Blue Index clients made around 10.2 million - a precursor to the Sanders' couple selling the business for around 8.0 million.
The FSA, which only started prosecuting notoriously tricky insider dealing cases in 2007 after being criticised for its "light touch" approach to regulation, had pushed for three custodial sentences despite the couple's young family.
"This was a case of systematic abuse by approved people of their privileged position in the market - we are determined to stamp out such abuse," said Tracey McDermott, acting head of enforcement at the Financial Services Authority (FSA).
"No doubt as they prepare to spend their first night behind bars, they will be reflecting on the consequences of their greed. Others, who might be tempted to do the same, should be in no doubt about our continued commitment to use all of the tools at our disposal to tackle those who abuse the market."
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The FSA was first alerted to possible insider dealing after spotting unusually heavy trade in U.S.-listed staffing services company Kronos ahead of its takeover by private equity house Hellman & Friedman Capital Partners in 2007.
Calling on the Securities and Exchange Commission (SEC), its U.S. peer, the regulator eventually pieced together the links between the Sanders couple and Miranda's San Francisco-based sister and brother-in-law, an M&A partner at accountancy firm Deloitte, "Annie and Arnie" McClellan.
In a tortuous case that involved trawling through 26 million emails and 800,000 phone calls recorded on Blue Index's office lines, regulators focused on dealings in five takeover targets: Kronos, Per Se, aQuantive, ChoicePoint and Getty Images.
McDermott told a journalist briefing there were "whoops of joy" in the FSA's offices when in one recorded telephone call, James Sanders' father Tim asks: "Is this not insider dealing?" James answers: "No, not really. Well ...". When his father laughs and says: "Try proving it", James says: "Yes, exactly".
A consummate trader, James Sanders told a newspaper in 2008 his mantra was: "Buy at the point of maximum fear" after snapping up a 5 million pound property in London's exclusive Kensington district for a 22 percent discount at the height of the credit crunch.
The FSA found what they called his "life plan" in his kitchen, in which he documented his plans to pay off his mortgages and luxury cars and resign from Blue Index by placing one 200,000 pound tip a year.
In a scribbled account, he put aside 100,000 pounds for a "car fund" and 50,000 for a watch, clothes, holidays and wine.
Blue Index was a specialist brokerage of contracts for differences (CFD), a tax-efficient trade that allows dealers to speculate on short-term price fluctuations of assets such as stocks by buying a percentage of their value, or "margin".
The FSA said the insider in the case was Miranda's brother-in-law Arnold McClellan, a senior partner at the San Francisco branch of Deloitte. It said Miranda's sister Annabel or Arnold leaked privileged, price-sensitive information to the British couple about U.S. securities listed in New York.
James Sanders then disclosed information to James Swallow and encouraged Blue Index clients to trade in those stocks.
Annabel McClellan has already been jailed for 11 months without parole and fined $1.0 million after being pursued by the SEC, Department of Justice (DoJ) and Federal Bureau of Investigation (FBI). No charges were brought against Arnold, who has now retired.
James Sanders, meanwhile, has been forced to park the Ferrari and has been disqualified as a director for five years. The court will decide on confiscation orders at a later date.
The FSA, which said it spent "millions" on pursuing the Blue Index case, is prosecuting 11 others for insider dealing - an offence that carries a maximum jail term of 7 years in the UK.
"This case really does demonstrate the FSA's determination to deliver criminal prosecutions for insider dealing," said Tim Dolan, a lawyer at Pinsent Masons.
"While the FSA have still brought relatively few criminal actions, and have not always been successful, results like this should go some way to deterring insider dealing in the future."
(Editing by Douwe Miedema and Jon Loades-Carter)
Source: uk.reuters.com
Here Comes The Dude? Wedding Planning Gets Manly - Fast Company
The season of ceaseless weddings is upon us, so Fast Company called up Chris Easter, cofounder of TheManRegistry.com, to find out if today's men take an equal interest in planning their weddings. Easter argues that they can and do--and the rapidly growing revenues of his site are an indication that he’s right. Just don’t expect a special “50 Hottest Bridesmaids” feature on his website anytime soon.
FAST COMPANY: What’s TheManRegistry.com?
CHRIS EASTER: TheManRegistry.com is an e-commerce site and informational resource for soon-to-be-engaged or currently engaged men. The idea was originally, let’s create a men’s gift registry. Registries typically focus on the kitchen, the bathroom, the bedroom, but there’s nothing aimed at men: grills, camping equipment, man cave stuff. The idea evolved into an overall comprehensive e-resource.
There’s a stereotype that men are less into wedding planning than women.
There’s some truth to it traditionally. But couples are getting married at older ages, closer to thirty than in their early 20s, and so couples are spending more of their own money and less of mom and dad’s money on weddings. If I’m spending my money, I’m going to be more involved, more hands-on with vendors. Our company proves that men do care intimately about planning their weddings and just needed an outlet. A lot of what guys are getting involved in was unheard of 30 years ago.
For example?
A close friend of mine wrote some custom music for the procession. He put his own twist on it.
Did he do it with an electric guitar and smash it at the end?
I pushed for that. It would have made the YouTube hall of fame. No, he kept it classical, but with a bit of a twist. There was a violin.
Until recently Conde Nast alone had multiple bridal magazines. How did they not figure out there would also be a market for grooms?
That was our question. The issue for us is the for-men-by-men approach. There was a website back in the 90s that tried to target the groom, but it got acquired by Brides.com, which took too much of a female approach. TheManRegistry is by men. It’s like reading Men’s Health or Maxim.
A Maxim for married men? That’s not a contradiction in terms?
I give Maxim as an example of a male-centric magazine.
You don’t have a “50 Hottest Bridesmaids” issue planned?
We haven’t gone there yet. We push the envelope occasionally. We’ve had content on wedding sex, what to do if you’re a virgin, sex on your honeymoon. But we take the process very seriously. The wedding day is the biggest day of both of your lives, equally for the groom and bride.
What’s your business model?
The revenue is split between e-commerce sales--we have over 4,000 products on the site--and we’re also ad-supported. The wedding industry is a $40 billion industry, so there’s quite a bit of space to carve out a niche for grooms.
Does anyone take you to task for labeling certain products as being for men? Some women grill, and some men bake.
The Man Registry is about being a man by stepping up and being involved in the planning of your wedding. Being a man can mean a lot of things. Being a man is not about being out with your shirt off drinking beers. It’s about: This is the biggest day of your life, and if you’re not involved, that’s a problem.
This interview has been condensed and edited.
For more from the Fast Talk interview series, click here. Know someone who'd make a good Fast Talk subject? Mention it to David Zax.
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[Image: Flickr user ashley.adcox]
Source: www.fastcompany.com
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