Monday 9 May 2016 10:00 pm

Operation Tabernula verdict: Two found guilty, three acquitted in insider trading case

An ex-City banker and a former Topshop finance director were found guilty yesterday evening following a trial that is widely considered to be the most significant insider trading case in British history.

Accountant Andrew Hind and former Deutsche Bank director Martyn Dodgson were convicted of conspiring to insider deal between November 2006 and March 2010, by a majority verdict.

However, the jury acquitted the other three men on trial: former Panmure Gordon stockbroker Andrew Grant Harrison, private day trader Benjamin Anderson and former Aria Capital director Iraj Parvizi.

The case was nicknamed Tabernula after the Financial Services Authority and Serious Organised Crime Agency operation which prompted it. It was ultimately brought to court by the Financial Conduct Authority (FCA).

The FCA hailed the outcome last night. The City watchdog, having been reconfigured in the wake of the financial crisis, has faced pressure to prove that it can successfully clamp down on wrongdoing in the Square Mile.

“The message is loud and clear that the FCA will not tolerate sophisticated predatory criminals abusing our markets,” said Mark Steward, director of enforcement and market oversight at the FCA. “This case demonstrates our capability and determination to root out this kind of abuse and ensure our market and the investing public are properly protected.”

Operation Tabernula began in March 2010 with a series of dawn raids that resulted in seven arrests and sent shockwaves through the City. Before yesterday, the FSA (and later the FCA) had secured three convictions – of former traders Graeme Shelley, Paul Milsom and Julian Rifat – as a consequence of the investigation.

Yesterday’s verdict was the result of a trial that started in January, after several years of delays, in part because the government's legal aid cuts caused some of the defendants to lose their legal counsel.

The case concerned the trading of shares in several top companies – BSkyB, Legal & General, Just Retirement, Paragon Group, and Scottish & Newcastle.

"Dodgson and Hind, who were close personal friends, instigated this insider dealing conspiracy,” the FCA said.

“The defendants put in place elaborate strategies designed to prevent the authorities from uncovering their activities. These included the use of unregistered mobile phones, encoded and encrypted records, safety deposit boxes and the transfer of benefit using cash and payments in kind.”

The jury was originally retired to consider its verdict on 25 April, and was instructed last week that majority verdicts, as opposed to unanimous ones, would be accepted.

“Although only a partial success, [yesterday's] convictions will be a relief for the FCA which had staked its reputation as a criminal prosecutor on the outcome of this case,” said Elly Proudlock, counsel in City law firm WilmerHale.

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