Three people have pleaded guilty to insider dealing following a prosecution brought about by the Financial Services Authority (FSA) relating to Blue Index, although two other employees caught up in the same case have been acquitted.
James Sanders, a director of the contract for difference (CFD) brokerage, pleaded guilty to a total of ten charges of insider dealing, while his wife Miranda Sanders pleaded guilty to five charges of insider dealing.
Meanwhile, James Swallow, a co-director of Blue Index, pleaded guilty to three charges of insider dealing, and all three will be sentenced on 19 June.
However, Christopher Hossain, a former senior trader at Blue Index and Adam Buck, a former employee of Blue Index, were acquitted of charges of insider dealing at a trial heard at Southwark Crown Court.
The prosecution had claimed that Arnold McClellan, a senior partner in a large US accounting firm, was ‘insider' to a number of mergers and acquisitions in US securities listed on the NYSE and NASDAQ exchanges.
The inside information was then leaked by Arnold McClellan, Miranda Sanders' brother in law, or her sister Annabel McClellan, and passed to the Sanders, who used the information to commit insider dealing in those US securities between October 2006 and February 2008.
James Sanders also disclosed information to others including James Swallow, who used that information to commit insider dealing, and also encouraged clients of Blue Index to trade in CFDs on the basis of that inside information.
The total profits generated by the defendants were approximately £1.9m, while the total profits generated by the clients of Blue Index were approximately £10.2m.
Tracey McDermott, acting director of enforcement and financial crime division, said: "James and Miranda Sanders orchestrated a long running, sophisticated and very profitable scheme. They no doubt thought that using information about US deals would make it more difficult for us to pursue.
"They did not count on the increasingly effective cross-border cooperation in these types of cases.
"We, and our overseas counterparts, are committed to working together to tackle abuse wherever it occurs."
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