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Insider Dealing: Two Plead Guilty

13th December 2016

Two plead guilty to insider dealing

The start of this month saw a Market Abuse case brought by the regulator – the Financial Conduct Authority (FCA) – against Mr Manjeet Mohal and Mr Reshim Birk.

As the FCA informs, by day three of the trial, both individuals pleaded guilty to three counts of insider dealing at the Central Criminal Court and will be sentences next year on 13th January 2017.

Mr Mohal had been employed by Logica Plc where he came into the possession of inside information related to the proposed takeover of Logica by CGI Holdings (Europe) Ltd, whilst Mr Birk was a neighbour of Mr Mohal’s.

Whilst Mr Mohal had been employed by Logica for many years and had been a trusted member of the Finance Team as well as the management reporting team, he disclosed this sensitive information to Mr Birk who was then able to use this information to his advantage in purchasing shares and options in Logica two days before a public announcement about the takeover was made. Mr Birk thus profited in excess of £100,000 as a result of insider trading, whilst Mr Mohal was guilty of illegal disclosure of inside information.

There was a third defendant, Mr Surrinder Sappal, however no evidence was offered against this individual.

Other Cases of Market Abuse:

This is not the first time that individuals in relation to the Logica takeover by CGI have been found guilty of market abuse.

Previously the former senior manager at Logica, Mr Ryan Wilmott, was sentenced to 10 months imprisonment in relation to two counts of insider dealing (in February 2015) and Mr Kenneth Carver was fined over £35,000 (in March 2015) for dealing in Logica shares on the basis of inside information.

Mr Carver who was a retired accountant had purchased 62,000 shares in Logica Plc on the basis of illegal inside information that had been fed to him by Mr Wilmott – a friend of the family. Had Mr Carver not co-operated with the FCA from a very early stage, his fine would have exceeded £122,000.

Regulator’s Stance:

The Executive Director of Enforcement and Market Oversight at the FCA, Mark Steward stressed that the FCA “are determined to do whatever is required to curb insider dealing and other market abuse to protect both the investing public and market integrity.” He added that the FCA “will continue to prosecute cases and hold wrongdoers accountable where there is sufficient cause.”

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FCA on CFDs:

“We will not hesitate to take robust action where individuals threaten the integrity of the UK financial markets”

Georgina Philippou,

previous acting director of enforcement and market oversight at the FCA,

27 March 2015