Two girlfriends of former Mizuho International Plc investment banker Thomas Ammann reaped returns of more than 2 million pounds ($3.2 million) trading on illegal tips about Canon Inc. (7751)’s acquisition of OCE NV, prosecutors said.
Christina Weckwerth took in nearly 2 million pounds after investing 1 million euros ($1.3 million) before the deal in 2009, Amanda Pinto, a lawyer for the U.K. Financial Services Authority, said in opening arguments at a London criminal court today. Jessica Mang, a British chiropractor, made 65,000 pounds on a 39,000-pound stake.
“These two women managed to almost double their money by trading on just one stock,” Pinto told the jury. “Each of the girlfriends considered Thomas Ammann to be their boyfriend, and neither knew of the other.”
The banker was in financial difficulties and was living beyond his means, Pinto said. Weckwerth, a single mother living off a “very generous divorce settlement” of 1.7 million euros, _ met him in 2008 on a dating website _, the prosecutor said.
Mang, who now owns a chiropractic clinic in Surrey, England, _ met Ammann at a nightclub _ in July 2009, Pinto said. When he first asked her to invest, she didn’t have the money or a trading account. He told her she would get returns as high as 80 percent, so she borrowed money from her mother and on credit cards and opened a brokerage account.
How exactly do they investigate and catch these people in cases like these? Is it based on “unusual” trading activity from brokerage accounts (i.e. this account always places trades right before info is made public), and then they take it from there. Does anyone know about what processes regulators actually use to police insider trading?
I believe they do what you’re saying. If they see somebody making odd amounts of money by executing trades right before material information is released, they will look into it. A CNBC special was done on some guys who paid line workers at “business weekly” (or some magazine) to call them and tell them the stock picks before the day’s issue was finished printing. The SEC noticed somebody making a bunch of money off of a reebok bet, and looked into it. Low and behold, a czech underwear seamstress has committed the trades… needless to say, they found some eastern european men were behind the scam.
Many years ago, NYSE investigators discovered residents from a small section of NYC were making a lot of trades in companies right before deals were announced. After months of investigating, they found that there was an investment banker who lived in the area and would go to a bar after work. After a few drinks, he would start “talking about his day” and the other regulars at the bar eventually figured out that he was disclosing pending deals weeks and months before the information was public.