Insider dealing trio sentenced to over five years

The playboy owner of defunct City brokerage Blue Index has been sentenced to four years imprisonment for his part in an international insider dealing ring.

Miranda Sanders and James Swallow were each sentenced to 10 months'
in prison for insider trading.

Telegraph.UK, by Jonathan Russell, Assistant City Editor, 20 Jun 2012

James Sanders, his wife Miranda and their business partner James Swallow were handed prison terms for what the judge described as “greedy” and “arrogant” crimes.

The three made millions of pounds for themselves and their clients by trading on inside information that came from a family member working for Deloitte in San Francisco.

The cash was used to fund a luxury lifestyle including multi-million pound houses in London and the purchase of sports cars including a Ferrari 575.

A member of the Sanders’ family broke down in tears as the sentence was handed down at Southwark Crown Court on Wednesday.

James Sanders was sentenced to four years reduced from six after pleading guilty. His wife Miranda and business partner Swallow were both given 10 month prison sentences.

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Mr Justice Simon said he had taken into account guilty pleas from all three and the effect of the sentences on the Sanders’ young children.

James Sanders was also disqualified from acting as a director for five years.

Documents produced in evidence showed a direct link between information given to the Sanders’ brother-in-law Arnold McClellan in his role as mergers and acquisitions partner in Deloitte’s San Francisco office and trades carried out by Swallow and Sanders.

No action was ever taken against Mr McClellan by US authorities who carried out a parallel investigation to the UK regulator the Financial Services Authority.

The spotlight fell instead to his wife Annabel, Miranda’s sister. She was jailed for 12 months earlier this year and agreed to pay a $1m fine after a detailed investigation into her part in supplying the information used to conduct the trades.

It is understood Mr McClellan has since retired from Deloitte.

In total the Sanders and Swallow traded in five companies involved in takeovers being handled by Mr McCellan. These included aQuantive, Getty and Kronos. The first trade in October 2006 netted the Sanders just £9,718 profit. However the size of the trades rapidly increased with Sanders in particular making up to £500,000 trading on the inside information.

In recorded telephone conversations James Sanders told his father Tim that he had got a “good one” going on to described how the source of his information was “Annabel, Miranda’s sister, her husband is the head of Deloitte Touche in the whole of the US.”

Swallow has agreed to pay £440,000 to settle a confiscation order brought by the FSA. A similar action against the Sanders is expected to be launched now the criminal proceedings have been finalised.

Tracey McDermott, acting director of enforcement and financial crime division, said: “These three individuals funded very comfortable lifestyles by cheating the system and other honest investors. No doubt as they prepare to spend their first night behind bars they will be reflecting on the consequences of their greed. Others who might be tempted to do the same should be in no doubt about our continued commitment to use all of the tools at our disposal to tackle those who abuse the market.”

Christopher Hossain and Adam Buck, former employees of Blue Index were acquitted.