April 5 (UPI) — A federal court in New York court fined British Billionaire Joe Lewis $5 million but escaped being sent to prison after pleading guilty to orchestrating what U.S. prosecutors said was a “brazen” insider trading scheme that saw recipients of his stock tips make millions of dollars.
U.S. District Judge Jessica Clarke also sentenced Lewis to three years’ probation in a plea deal Thursday after his legal counsel told the court that jail time for sharing private corporate information would be “catastrophic” for the 87-year-old.
Lewis pleaded guilty in January to two counts of securities fraud and one count of conspiracy to commit securities fraud by repeatedly passing intelligence gleaned from the access he had to corporate boardrooms to people around him including romantic partners, friends, personal assistants and two pilots who flew his private aircraft.
Broad Bay Limited of London, which is owned by Lewis, was also fined $44 million after pleading guilty to one count of securities fraud for covering Lewis’ tracks.
Lewis was facing up to 20 years in prison but the U.S. attorney raised no objection to the defense’s argument he should get probation citing his guilty plea, cooperation with authorities and deteriorating health.
Clarke said she had weighed the imperative to make an example of Lewis to deter other people from engaging in similar illegal activities, but concluded that his situation required her to exercise clemency
“Crimes like insider trading strike at the heart of our financial markets. The integrity of our markets rely on the idea that there is a level playing field,” she said.
A contrite Lewis, one of Britain’s richest men, apologized and said he took responsibility for committing the offenses.
“I made a terrible mistake. I broke the law. I’m ashamed, sorry and hold myself accountable,” he said.
In one of the frauds, Lewis loaned $500,000 each to two of his pilots in 2019 to purchase stock in Nasdaq-listed biotech firm Mirati to enable them to cash in on inside information that it was about to announce positive results for a cancer drug it was developing.
The stock jumped 16% on the announcement the pilots took their profit and “paid back” the loans to their boss.
He shared the same tip with his girlfriend after having earlier advised her to buy shares in Solid Biosciences, in which his Tavistock Group was an investor, on the basis of non-public information about clinical trial results to which he was party.
The prosecution’s case was that while Lewis’ misappropriation of insider information was not for the purposes of augmenting his estimated $6.2 billion personal fortune but to pay back employees or to “gift” lovers and friends, it still constituted classic corporate corruption, they also argued Lewis was sufficiently wealthy to help out his inner circle without resorting to fraud.
Lewis had claimed he felt guilty for failing to set up formal retirement plans for his pilots, according to a statement when he pleaded guilty in January.
Born in London’s East End, Lewis’ rags-to-riches story made him a celebrity in Britain.
His Tavistock Group has amassed a multi-billion dollar portfolio of property, sports, finance, energy and life sciences companies in the half-century since he founded it in 1975.
He made hundreds of millions more from currency trading in the 1980s and 1990s but is best known for his association with premier League football team Tottenham Hotspur in which he purchased a controlling stake in 2001 — but has since handed the reins to a family trust.
He owns homes in several countries including the Bahamas, where he currently lives, a $200 million art collection and a 98-meter $250 million yacht that he used as surety for a bail bond following his arrest in July.
