AN extraordinary insider dealing case that took investigators from the windswept towers of Canary Wharf to the sun-kissed tropics of Mayotte is expected to end today with jail terms for each of the three suspects.
The case against a banker, his wife and their accomplice was a flagship investigation for the FSA – a warning shot to the City that insider trading will not be tolerated.
But it had a wider significance; the future of the FSA is unclear, its responsibilities soon to be subsumed into the Consumer and Markets Protection Authority, with few guarantees on how this will affect the organisation’s current employees. The collapse of such a high profile case, which has eaten thousands of man-hours and hundreds of thousands of pounds, would have played very badly indeed.
The investigation was sparked from a fairly commonplace suspicious trade flagged up by a broker, relating to shares traded in Highway Insurance in 2008, then a possible takeover target.
An investigator from the FSA’s monitoring team – predominantly made up of people who have had experience working in markets – uncovered evidence of suspicious trades from four distinct accounts. In each case the trader bought shares before the deal was announced and sold them over a two week period after it had closed. The account holder in all four cases was one Helmy Omar Sa’aid.
Delving into Sa’aid’s transaction history, the FSA found accounts dating back to 2002, with 22 trades following a similar pattern. Of those, 15 were advised by investment bank Dresdner Kleinwort. However, no link could be found between Dresdner and the Highway deal that had sparked the investigation.
Correlating data on the hundreds of people listed as having inside information on the flagged deals threw up the vital clue – one banker had left Dresdner for rival Shore Capital, which had worked on the Highway deal; Christian Littlewood, a well-heeled, Bristol-educated (then) 35-year-old who specialised in advising on mid-market corporate finance deals.
After establishing him as the prime suspect, the case was passed to the FSA’s enforcement team. The first step was to establish a link between Littlewood and Sa’aid.
This involved meticulously data-mining information about the suspect. An early sign they were on the right track was the discovery that Littlewood’s wife, Angie Lew, and Sa’aid were both Singaporean nationals, hinting at a possible connection.
Moreover, significant payments were made from Littlewood to one Siew Yoon Lew, which marriage records would later prove was Angie’s maiden name. Obtaining access to Littlewood’s email account provided a direct link between the banker and Sa’aid, whose name was discovered in his contacts. It also emerged Lew had written an employer’s reference to Sa’aid’s common law wife – proving a relationship between the two.
Lew and Sa’aid were implicated in dozens of suspicious trades, often apparently acting on the same information. Littlewood would later argue in his mitigation that he was unaware of the extent of his wife’s trading.
With enough evidence prepared, the FSA raided Littlewood’s house and two addresses registered to Sa’aid. Littlewood and Lew were dragged off for questioning but their accomplice was nowhere to be seen.
THE SMOKING GUN
Neither husband nor wife would comment but a search of the house uncovered a wealth of evidence. What had appeared to be a sophisticated scheme crumbled.
Perhaps the most outrageous find was a stash of disks hidden in the garden shed that detailed companies that Lew had interests in (some of which the FSA had not then linked to the case), profits she had booked and even handy notes scribbled in pencil dividing the spoils into three even piles.
When laid bare the evidence was damning. Sophisticated software plotted the exact times of phone conversations between Littlewood and his wife, follow-up calls between Lew and Sa’aid and the subsequent share placements, usually split into several transactions of under £10,000.
Bank statements and cheques showed Lew acting as the conduit for cash between her husband and Sa’aid, some totalling as much as £140,000.
SIX MONTHS HARD GRAFT
With the case falling into place, the next six months were dedicated to sifting through and categorising the vast cache of disks, phone records, computer drives and documents dating back over 10 years. The computer files alone, if printed onto A4 paper, would have dwarfed One Canada Square. One mistake at this point could have been enough to destroy the carefully constructed case.
Meanwhile, an investigation with the Monetary Authority of Singapore had tracked Sa’aid down to the island of Mayotte, a French territory located between Mozambique and Madagascar. He was found through import receipts for a pizza business he was setting up – presumably planning a life of luxury on the island frequented by rich ex-pats and foreign dignitaries. The FSA worked with French authorities and, jetting off to the island, apprehended Sa’aid – the first time extradition has been sought for insider dealing.
THE END GAME
Of the 51 suspicious transactions identified, the FSA pressed ahead with 13 charges, plus an over-arching charge of conspiracy. The total trades investigated totalled more than £5.5m, while the 13 that made up the prosecution case were worth £2.1m and booked a profit of £590,000.
Littlewood and Lew both pleaded guilty but Sa’aid maintained he was innocent until the first day of his trial, last month, when he finally admitted his role in the ring.
Today it is all but certain the three will face prison. Sa’aid has seen £600,000 of his assets frozen; his dream of a life of luxury in the Indian Ocean swapped for time behind bars.