UK: First Insider Trading Trial in Four Years Underway in Southwark

The UK’s first insider trading trial in four years began today in Southwark Crown Court as prosecutors pressed forward with their case against Euan Carlisle.  Carlisle, a former director of restaurant group Belgo, is alleged to have used confidential information passed to him by a senior employee of Belgo to buy shares ahead of two crucial company announcements. Prosecutors told the court today that Carlisle made tens of thousands of pounds in profits by taking advantage of the inside information.

The Times Online reports that the alleged insider dealing occurred ahead of the £10 million reverse takeover of Belgo in December 1997 and the announcement of three significant restaurant acquisitions in May 1998. On both occasions, said Ms. Sarah Whitehouse for the prosecution, the “share price went up [after it became public knowledge] and he sold all the shares, making a handsome profit.”

The Times Online reports that Carlisle denies the charges of insider dealing, and is expected to argue that he decided to buy the shares using his knowledge of the stock market alone.

Notably, Carlisle is being prosecuted by the Department for Business and Regulatory Affairs, whose precursor, the Department for Trade and Industry, was responsible for prosecuting insider dealing before the Financial Services Authority took over that role in 2004. The FSA reportedly has four prosecutions of its own underway, the first of which is expected to reach trial next month.

Read the Times Online article