A former Deutsche Bank director has been handed the longest ever sentence for insider dealing in a case brought by the FCA.
Investment banker Martyn Dodgson and chartered accountant Andrew Hind have been hit with jail sentences after being convicted of insider dealing this week.
Dodgson and Hind were convicted on Monday, and have now been handed 4.5 year and 3.5 year sentences, respectively. Confiscation proceedings will also be pursued for both.
It marks the conclusion of the FCA’s largest ever investigation into insider dealing, and saw the regulator partner with the National Crime Agency under the banner of Operation Tabernula.
Tabernula has so far seen the authorities secure five convictions, including those of Dodgson and Hind.
The FCA and its predecessor, the FSA, has now secured 30 convictions for insider dealing.
Sentencing Dodgson and Hind, Judge Pegden described their offending as “persistent, prolonged, deliberate, dishonest behaviour.”
FCA director of enforcement and market oversight Mark Steward said: “This case involved serious offending over a number of years, conducted in a sophisticated way using deliberate techniques to avoid detection. Dodgson was an approved person who was entrusted by his employer with sensitive and valuable information. He betrayed that trust by exploiting the information for his own benefit, conspiring with Hind to deceive the market
“Insider dealing is ever more detectable and provable. And this case shows lengthy terms of imprisonment, not profits are the real result.”
Between December 2006 and March 2010, personal friends Dodgson and Hind used inside information sourced from Dodgson to effect secret dealing for their own benefit.
To prove the conspiracy, the FCA – working with the NCA – relied on five acts of insider dealing at five companies: Scottish & Newcastle in October 2007, Paragon Group of Companies in July 2008, Just Retirement in October 2008, Legal & general in February 2009, and BSkyB in March 2010.
The investigation uncovered elaborate strategies used by Dodgson and Hind to cover up their activities. These included using unregistered mobile phones, encoded and encrypted records, safety deposit boxes and the transfer of benefit using cash and payments in kind.