A retired partner at Cazenove, the Queen's stockbroker, was jailed for 21 months today after being convicted of insider dealing.

Malcolm Calvert used an unknown insider to get confidential information proposed takeovers and mergers.

He then directed his friend Bertie Hatcher to buy shares in three firms, making the pair more than £100,000 profit, Southwark crown court heard.

Calvert, 65, who retired from Cazenove 10 years ago, used confidential information to tell Mr Hatcher to buy shares worth more than £500,000, making the pair a gross profit of £103,883.11.

Peter Carter QC, prosecuting, said Calvert used his friend because he was too close to the action to buy the shares himself.

His share of the profits was passed to him in an envelope of cash left with a racecourse bookmaker. Prosecutors said Calvert took two thirds, with a third going to Mr Hatcher, because he used his share to pay the Cazenove insider.

The shares included 70,000 in pharmaceutical company Vernalis, 50,000 shares in road construction firm Johnston Group Plc and 30,500 shares in water firm South Staffordshire Plc between June 24 2003, and October 18 2005, the jury found yesterday.

Sentencing Calvert, Judge Peter Testar said it was wrong to think that insider dealing was a victimless crime: “It leads to the dishonest enrichment of a few at the expense of the public interest and of confidence in a clean and fair market.”

He said Calvert “conducted these offences entirely deliberately”, and that his conviction showed “nothing more or less than if someone is determined to break the rules it's impossible to stop them”.

While he was retired, and therefore not subject to any regulatory practices, “he must have had a very clear understanding of the seriousness of what he was doing”.

Judge Testar also said he suspected Calvert shared his profits with the insider.

Mr Hatcher, a retired bookmaker and insurance broker, gave “valuable evidence” against Calvert and escaped prosecution, but was fined £56,098 for market abuse.

Calvert, of Cobham, Surrey, was cleared of the seven other counts which related to three companies - cider-makers HP Bulmer Plc, Scotland-based Macdonald Hotels Plc, and motoring organisation the RAC Plc.

A hearing to determine the sum of money to be confiscated from him, and the amount of prosecution costs he must pay, will be held on 23 April.

The Financial Services Authority, which brought the case against Calvert, said his conviction was “a shot across the bow for any City workers who may be tempted to trade using insider knowledge”.

Margaret Cole, the FSA's director of enforcement and financial crime, said the regulator would “continue to enter into agreements of this sort where we believe it is in the public interest and interests of justice”.

Judge Testar made clear that he found “no fault on the part of any institution”. A Cazenove spokesman said: “This case was against an individual who left Cazenove in 2000 and was in connection with matters between 2003 and 2005. There were never any charges brought against Cazenove and no breach of systems and controls was identified.”