In a somewhat surprising finish to a high-level trial in Britain, former JPMorgan (NYSE:JPM) Cazenove partner Malcolm Calvert was convicted five counts of insider trading.
The lawsuit was filed by the Financial Services Authority, which has won two other cases over the last year or so. Calvert, 65, could be sentenced up to seven years in jail as a consequence of the conviction.
This was a somewhat strange case in that Calvert hadn’t worked for Cazenove in the time period between 2003 and 2005 when the actions allegedly took place. He had left the firm about 10 years ago when he retired.
The case was also strange because the recipient of Calvert’s advice, a man named Bert Hatcher, now suffers from dementia, and was unable to testify as a result.
Calvert recommended to Hatcher to acquire shares in six different companies between 2003 and 2005, all of which were winners for him, generating the charges against Calvert. Supposedly this happened before so-called market-moving announcements came right before the trades.
All the prosecution had from Hatcher was a written statement, and really no other evidence other than the successful advice given by Calvert.
Something doesn’t smell right in this case to me, as the FSA and Britain seem to be doing the usual punishing of someone for being successful or to give the impression they’re pursuing misconduct.
This of course takes the focus off of terrible government policies which helped lead to the economic crisis in the first place.
For this man to be convicted with no evidence but a statement written by a man too sick with dementia to testify, and only a dubious connection between advice and events, is a travesty of justice in my mind. It shouldn’t have even been allowed to go to trial.
For Calvert, he will be sentenced sometime tomorrow.
