The first insider dealing criminal case brought by the FSA has resulted in a solicitor and his father-in-law being found guilty.
A jury at Southwark Crown Court today found Christopher McQuoid guilty of passing inside information to James Melbourne, which Melbourne then used to make a near £50,000 profit, which he split with his son-in-law.
The case related to plans by telecommunications giant Motorola in 2006 to take over McQuoid's firm, TTP Communications, where McQuoid was a general counsel.
Two days before the takeover was made public, Melbourne bought just under 154,000 TTP shares at 13p each. The takeover was announced at an agreed share price of 45p per stock, netting Melbourne a grand total of £48,919.20.
The FSA says not only had Melbourne not bought any TTP shares before but that, three months after the deal was completed, he wrote McQuoid a cheque for £24,459.60, exactly half the profit made from the TTP shares trade.
"McQuoid took advantage of the trust placed in him as TTP's legal counsel and, with his father-in-law, has been found guilty of cheating the market," FSA director of enforcement Margaret Cole says.
"By pursuing a criminal prosecution in this case, the FSA has shown it will take tough action to achieve its aim of credible deterrence in the financial markets."
Gerallt Owen, defence solicitor for McQuoid, says: "We are very disappointed with the jury's majority verdict and are actively considering and anticipate submitting an appeal."
At the time, the case was the first of its kind brought by the FSA, although it is now prosecuting in three other insider dealing criminal cases. McQuoid and Melbourne will be sentenced on 30 March.IFAonline
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