Afternoon:
9°c
Former partner at Queen's stockbroker Cazenove guilty of insider dealing
Paul Cheston, Courts Correspondent11 Mar 2010
Malcolm Calvert, a former partner at the Queen's stockbroker, faces jail today after being convicted of insider dealing.
Calvert, who retired from investment bank Cazenove 10 years ago, used an unknown insider to get confidential information on a series of proposed takeovers and mergers.
He then directed his friend Bertie Hatcher to buy more than 150,000 shares in three firms, making the pair more than £100,000 profit.
Peter Carter QC, prosecuting, said Calvert used Mr Hatcher because he was too close to the action to buy the shares himself and could not risk using his own name.
Southwark crown court heard Calvert, 65, from Surrey, took two thirds of the profits, with a third going to Mr Hatcher, because he used his share to pay the Cazenove insider, who has never been traced.
Mr Hatcher, 67, a retired bookmaker and insurance broker, gave “valuable evidence” against Calvert and escaped prosecution, but was fined £56,098 for market abuse, the FSA said.
The jury heard a recording of a phone call which Mr Hatcher made to his stockbroker at Hargreaves Lansdown on 18 October 2004.
While on hold during the purchase of 27,500 shares in water firm South Staffordshire Plc, Mr Hatcher could be heard making a call on a second line to Calvert.
“Hi Malcolm,” Mr Hatcher said, before asking him how to proceed.
Mr Hatcher replied: “The only time I buy shares is when I hear from you, that's the only time.”
Mr Carter said the call showed Mr Hatcher “was simply acting on the back of information that Mr Calvert had”.
He went on: “It was something more than just giving tips. It was direct involvement in these transactions. Somebody at his old place of work was passing information to him that they should not have done.”
Mr Hatcher, of Ipswich, who suffers from dementia and was unfit to give evidence, told Financial Services Authority investigators the charges related to “shares that I bought and sold on the recommendation of Malcolm Calvert”.
He went on: “It's only a guess but it seems likely that his source originally worked at Cazenove.”
He used confidential information to tell Mr Hatcher to buy 70,000 shares 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 24 June 2003 and 18 October 2005, the jury found. These deals made the pair a gross profit of £103,883.11, with two-thirds going to Calvert.
Calvert was cleared of the seven other counts which related to a further three companies - cider-makers HP Bulmer Plc, Scotland-based Macdonald Hotels Plc, and motoring organisation the RAC Plc.
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.”
Margaret Cole, director of enforcement and financial crime at the FSA, 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”.
Reader views (1)
Cazenove have never been the Queen's stockbrokers. James Capel always have had the honour,
- Mordwinoff, Lisle France, 10/03/2010 16:27
Report abuse
