Anjam Saeed Ahmad, an ex-hedge fund trader and risk manager with AKO Capital LLP (AKO), was today sentenced to 10 months imprisonment, suspended for two years, 300 hours of unpaid work in the community and fined £50,000 for insider dealing. On 18 May 2010 Ahmad pleaded guilty to one count of conspiracy to commit insider dealing contrary to Section 1 of the Criminal Law Act 1977. A further offence of insider dealing committed on 19 February 2008 was taken into consideration.
Between 15 May 2009 and 22 August 2009 he conspired with another individual to deal in at least 19 different securities, based on inside information obtained by Ahmad in his role as a trader at AKO about forthcoming transactions by AKO in those securities.
The case was bought by the Financial Services Authority (FSA) and heard at Southwark Crown Court.
Ahmad agreed to plead guilty after entering into an agreement with the FSA under the Attorney General’s Guidelines on Plea Discussions in Cases of Serious or Complex Fraud. He has also entered into an agreement with the FSA under Section 73 of the Serious Organised Crime and Police Act 2005 (“SOCPA 2005”) to assist the FSA with its investigation into his co-conspirator. The FSA was granted powers to enter into agreements under SOCPA 2005 on 6 April 2010 and this is the first time that the FSA has used these powers.
A confiscation order was made against Ahmad in the sum of £106,280.
Passing sentence, His Honour Judge Rivlin said:
“It is only because of the quite exceptional mitigating factors such as the swift and timely admissions to the FSA and other matters such as the SOCPA agreement that saves you from immediate imprisonment today.
“I have received a large amount of information from the FSA and none of this crosses the lines of the cases of Innospec and Dougall and this has been of very great assistance to me. I would like to compliment the FSA and the Defence for the manner in which the investigations were conducted and the manner in which they have complied with the Attorney General’s guidelines on plea agreements.”
Margaret Cole, director of enforcement and financial crime at the FSA, said:
“This is a significant step in our fight against market abuse. The FSA has shown that we will take tough action and use all the tools at our disposal to achieve our aim of credible deterrence in the financial markets. Insider dealers should recognise the real risk of being pursued through the criminal courts and stripped of the benefits of their crimes.
“This is the first time that we have used our powers under SOCPA to enter into an agreement with a co-operating defendant. Ahmad’s decision to co-operate with the FSA has resulted in a significant reduction to his sentence. This may encourage others to provide the FSA with information that could assist in the investigation and prosecution of suspected cases of insider dealing and market abuse.”
Ahmad has also agreed to a Final Notice requiring him to pay a sum of £131,000 to the FSA. This represents the disgorgement of profits he made from regulatory misconduct unrelated to the insider dealing. Between February 2008 and August 2009 Ahmad used his position as a trader and risk manager at AKO to direct preferential trades and rates of commission towards an associate of his who worked as a cash equities broker (“Broker A”), in exchange for the payment of cash and gifts. Ahmad received total payments worth £131,000, in cash, gift vouchers, gold, flights and hotel bookings. The amount paid to Ahmad was directly attributable to the amount of commission earned by Broker A for trades placed with him by Ahmad. Ahmad received 35 per cent of Broker A’s net commission income in 2008 and 50 percent in 2009.
AKO co-operated fully in the investigation and the FSA makes no criticism of the firm.
