A UK jury found former CSFB compliance officer Asif Butt guilty of insider trading just before Christmas. The gamekeeper turned poacher now faces up to seven years in jail.
Not content with what was probably a decent salary package from CSFB, 35 year-old Butt decided to try and make a little extra cash on the side. Between July 1998 and January 2002, Butt made use of privileged information at his firm and passed on insider tips to four external parties, who used the tit-bits to scoop a fortune in a spread-betting scam. Prosecutors have found it difficult to gauge just how much Butt and his ring actually made from their tidy arrangement, but say that it could have run into millions. The minimum estimate is that Butt and his cohorts made $509,000 spread-betting ahead of deals like the Royal Bank of Scotland's takeover of NatWest.
Butt, who is thought to be the first City compliance officer to be found guilty of insider trading, is said to have walked off with the lion's share of the spoils and made at least $328,000 . The former CSFBer was fired by his firm in January, 2002, when allegations of wrongdoing first came to light. He contended that he was safe from prosecution as it was not illegal for others to lay off spread bets for him on insider tips he provided! The judge dismissed this notion as nonsense.
Using the code name 'The Walrus', Butt covertly passed confidential information to four friends, all of whom were found guilty last week of conspiracy to commit insider trading. All five face sentencing in the new year.