A former member of the finance team at Logica and his neighbour have been given suspended prison sentences after pleading guilty to charges of insider trading, as part of the Financial Conduct Authority’s (FCA’s) investigation at the technology company which has also seen its former group reporting and financial planning manager jailed
Manjeet Mohal, who was a business analyst at the company, has been sentenced to 10 months imprisonment suspended for two years in respect of two counts of insider dealing. He was also ordered to undertake 180 hours of community work.
Reshim Birk, a neighbour of Mohal’s in Southall was sentenced to 16 months imprisonment suspended for two years in respect of one count of insider dealing. He was ordered to undertake 200 hours of community work.
A confiscation order of £162,876.69 was made against Birk and prosecution costs of £42,593.35 were awarded to the FCA in respect of each defendant.
The court heard that during his employment at Logica, Mohal came into possession of inside information relating to a takeover of Logica by CGI Holdings (Europe) Ltd in a £1.7bn deal in 2012. Mohal disclosed details to his neighbour, and another individual before completion of the acquisition, which saw Logica shares jump by around 60%. Birk then traded in shares and options relating to Logica while in possession of that inside information and made profits in excess of £100,000.
In sentencing the judge remarked: ‘But for the diligence of those investigating, he [Birk] may have got away with it.’
Mark Steward, the FCA executive director of enforcement and market oversight, said: ‘Mr Mohal was a trusted employee and he abused that position. This is another clear example for those who are tempted to insider deal that they are more likely to be caught than ever before.’
In 2015, the FCA brought a successful prosecution against Ryan Willmott, Logica’s former group reporting and financial planning manager, who pleaded guilty to three counts of insider dealing and was sentenced to 10 months imprisonment at Southwark Crown Court. In addition he was ordered to pay £6,122 towards prosecution costs and a confiscation order in the sum of £23,239.75.
The regulator also took action against Kenneth Carver, a retired accountant, who purchased 62,000 shares in Logica on the basis of information that Willmott, a family friend, provided to him prior to the takeover.
Shortly after the deal was announced Carver sold all his shares, making a profit of £24,206.70. He received a £35,212 fine, with the regulator reporting that he gave significant co-operation and provided a detailed account of events at an early stage of the investigation alongside evidence of serious financial hardship to the FCA. Carver also settled at an early stage of the investigation. Had it not been for this, the FCA would have imposed a financial penalty of £122,212.
