UK billionaire Joe Lewis, whose family trust controls Premiership football team Tottenham Hostpur, yesterday pleaded guilty to criminal charges in a US court for insider trading. He was facing one charge of conspiracy to commit securities fraud as well as two counts of securities fraud.
Lewis was originally charged back in July, accused of passing insider information on a couple of portfolio companies to, among others, the pilots of his private jet as well as friends and romantic partners. This allowed them to make literally millions out of the deals.
Prosecutors claimed Lewis even loaned his pilots $500,000 and encouraged them to buy stock in cancer drug firm Mirati Therapeutics. This was ahead of favourable results from a clinical trial.
His company, Broad Bay, is also in the dock, and pled guilty to participating in a scheme that allowed him to hide his ownership of shares in a pharmaceutical company, making false filings and misleading financial statements. Broad Bay will be paying $50m in penalties as part of its plea.
“Lewis abused inside information he gained through his access to corporate boardrooms to tip off his friends, employees, and romantic interests,” said Manhattan U.S. Attorney Damian Williams, whose office prosecuted the case. “Now, he will pay the price with a federal conviction, the prospect of time in prison, and the largest financial penalty for insider trading in a decade.”
Lewis is the founder of Tavistock Group, which values him currently at around $6bn. He will not be pleading guilty to some other charges however. This includes 14 counts of securities fraud, plus two counts of conspiracy, covering crimes that allegedly took place between 2013 and 2021.
Lewis has been stuck in the US awaiting trial, allowed to stay outside prison thanks to a $300m bail bond which has been secured against his private jet and his yacht.
In a statement for the billionaire, his office said: “Today, Joe Lewis acknowledged his conduct in connection with a number of stock trades by individuals close to him. Mr. Lewis did not engage in improper trading in his own accounts. His conduct should be viewed in the context of Mr. Lewis’ long life of accomplishment and integrity.”
The SEC had also filed a parallel civil complaint against Lewis and his pilots, as well as former girlfriend Carolyn Carter. The US regulator was seeking disgorgement of hundreds of thousands of dollars in what it said were “ill-gotten gains.”
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Lewis has mainly transacted in shares through his portfolio company Tavistock Group. Other investments prosecutors zeroed in on included Solid Biosciences and Australian Agricultural Company.
At the time of the unsealing of their indictments against Lewis, US prosecutors said he abused his access to corporate boardrooms and used inside information to compensate his employees. “It’s cheating, and it’s against the law,” Williams told journalists.
Tavistock Group is based in the Bahamas and has publicly declared investments in more than 200 listed companies. Lewis made his money originally in the restaurant trade having worked in his family catering business. He has lived in the Bahamas since 1979. He subsequently made even more money as a currency trader, including a lucrative bet against the pound on Black Wednesday in 1992. He took control of Spurs when he bought the shares of Lord Alan Sugar in 2001.