Judge Pegden QC at Southwark Crown Court has issued confiscation orders to the value of £1,074,236 against Martyn Dodgson and £624,521 against Andrew Hind, who must pay within three months or the former will face a further 7½ years in prison and the latter will face a further 5½ half years. The two men made the grave mistake of keeping meticulous records.

These confiscation orders are the result of a prosecution by the UK's Financial Conduct Authority in which Messrs Dodgson and Hind were convicted of conspiring to deal in securities on the strength of inside information. The existence of the conspiracy was proved by evidence in relation to five stocks, but in total the amounts to be confiscated include profits generated from trading in a further 23 stocks, which activity the FCA says is tantamount to insider dealing. As the court deems both defendants to have a criminal lifestyle due to the extent of their offending, it has assumed that the profits made from other trading in a certain period also represented the proceeds of insider dealing and, therefore, the men benefited from general criminal conduct. They did not challenge that assumption in relation to their trading in the additional 23 stocks.

Mark Steward, the FCA’s enforcement director, chided them for their greed and self-interest. They were convicted on 9 May last year at the end of a three-month trial. Three days after that, Dodgson was sentenced to 4½ years’ imprisonment and Hind to 3½. Their conspiracy operated between 1 November 2006 and 23 March 2010. During that time, Dodgson held senior positions at Morgan Stanley, Lehman Brothers and Deutsche Bank. He used those positions to secure inside information, which he passed on to his close friend, Hind, who in turn caused trades to be placed for the benefit of both defendants.

The defendants were ingenious in evading the notice of the authorities. They used unregistered mobile telephones, safety deposit boxes and encoded/encrypted records. They also used multifarious methods to distribute the benefits they obtained from their skulduggery. Their their meticulous recordkeeping ultimately proved to be their Waterloo. Confiscated records contained evidence of trading in a variety of stocks and the amounts to which each was to benefit. This made it far easier for the FCA to demonstrate the full extent of each defendant’s benefit from his criminal conduct.