On April 5, British Billionaire Joe Lewis was fined $5 million by a federal court in New York for his involvement in an insider trading scheme. Despite pleading guilty, Lewis managed to avoid imprisonment. U.S. prosecutors described the scheme as “brazen” and highlighted how recipients of Lewis’s stock tips profited greatly, making millions of dollars.
U.S. District Judge Jessica Clarke sentenced Lewis to three years’ probation in a plea deal on Thursday, considering the potential catastrophic impact of jail time on the 87-year-old.
Lewis admitted his guilt in January for committing securities fraud. He confessed to sharing confidential information, which he obtained from his access to corporate boardrooms, with various individuals in his personal circle. This included romantic partners, friends, personal assistants, and even the pilots who flew his private aircraft.
London-based company, Broad Bay Limited, owned by Lewis, has been fined a staggering $44 million. The company pleaded guilty to a single count of securities fraud, which involved covering up Lewis’ actions.
The U.S. attorney did not object to the defense’s argument that Lewis should receive probation instead of a 20-year prison sentence. They acknowledged Lewis’ guilty plea, cooperation with authorities, and declining health as factors supporting this request.
Clarke decided to exercise clemency in Lewis’ case after considering the importance of setting an example to deter others from engaging in illegal activities.
“Insider trading is a crime that significantly undermines the integrity of our financial markets,” she emphasized. “The very foundation of our markets is built on the principle of a fair and level playing field.”
Lewis, a wealthy British man, expressed remorse and took full accountability for his actions, offering a sincere apology for committing the offenses.
“I deeply regret the terrible mistake I made. I acknowledge that I have broken the law, and I feel a profound sense of shame and remorse. I take full responsibility for my actions and am sincerely sorry for the harm I have caused.”
In 2019, Lewis engaged in a fraudulent scheme where he lent $500,000 to two of his pilots. The purpose of this loan was to enable them to purchase stock in the biotech company Mirati, which was listed on Nasdaq. The pilots used this inside information to their advantage and anticipated positive results for a cancer drug that Mirati was developing.
The announcement of the pilots taking their profit and “paying back” the loans to their boss led to a 16% jump in the stock.
He later shared the same tip with his girlfriend, after previously advising her to invest in shares of Solid Biosciences. It is important to note that his Tavistock Group had invested in the company, and he had access to non-public information about clinical trial results.
According to the prosecution, Lewis’ use of insider information did not aim to increase his already considerable personal fortune of $6.2 billion. Instead, he allegedly used the funds to repay employees or as “gifts” for his loved ones and friends. Despite this argument, the prosecution maintained that such actions still amounted to traditional corporate corruption. They further contended that Lewis, given his immense wealth, had the means to assist his inner circle without resorting to fraudulent activities.
According to a statement made when he pleaded guilty in January, Lewis expressed remorse for not establishing proper retirement plans for his pilots.
Lewis’ journey from the poverty-stricken streets of London’s East End to becoming a celebrated figure in Britain is nothing short of remarkable.
In 1975, he founded the Tavistock Group, which has grown into a multi-billion dollar portfolio of companies in various sectors including property, sports, finance, energy, and life sciences.
In the 1980s and 1990s, he earned hundreds of millions through currency trading. However, he is most renowned for his involvement with the premier League football team Tottenham Hotspur. In 2001, he acquired a controlling stake in the club but has since transferred control to a family trust.
He currently resides in the Bahamas and owns homes in various countries. Additionally, he possesses a remarkable $200 million art collection and a luxurious $250 million yacht measuring 98 meters in length. Interestingly, he even utilized his yacht as collateral for a bail bond after his arrest in July.
