A federal court in New York fined British billionaire Joe Lewis $5 million, but he avoided prison after pleading guilty to arranging what U.S. prosecutors described as a “brazen” insider trading scam in which beneficiaries of his stock tips made millions of dollars.
U.S. District Judge Jessica Clarke also sentenced Lewis to three years of probation in a plea deal Thursday, after his lawyer warned the court that jail time for exposing sensitive corporate information would be “catastrophic” for the 87-year-old.
In January, Lewis entered a guilty plea to two counts of securities fraud and one count of conspiracy to commit securities fraud. This was due to his repeated dissemination of intelligence, obtained through his access to corporate boardrooms, to individuals in his vicinity, such as romantic partners, friends, personal assistants, and two pilots who flew his private aircraft.
Lewis, the owner of Broad Bay Limited of London, also received a $44 million fine after admitting guilt to one count of securities fraud for hiding his activities.
Lewis faced up to 20 years in jail, but the US attorney did not object to the defense’s claim that he should be granted probation, given his guilty plea, cooperation with investigators, and worsening health.
Clarke said she evaluated the urgency of making an example of Lewis to dissuade other people from engaging in similar illicit activities but decided that his situation compelled her to exercise clemency.
“Crimes such as insider trading strike at the core of our financial markets. “The integrity of our markets is based on the idea of a level playing field,” she stated.
Lewis, one of Britain’s richest men, apologized and accepted responsibility for the acts.
“I made a horrible mistake. I breached the law. “I am ashamed, sorry, and hold myself accountable,” he stated.
In one of the scams, Lewis gave two of his pilots $500,000 each in 2019 so they could purchase stock in the Nasdaq-listed biotech company Mirati. This allowed them to profit on inside information that the company was about to reveal promising results for a cancer medicine it was developing.
Following the announcement that the pilots took their profits and “paid back” their boss’s loans, the stock surged 16%.
He shared the same tip with his fiancée after previously advising her to invest in Solid Biosciences, in which his Tavistock Group was a shareholder, based on non-public information concerning clinical trial findings to which he had access.
The prosecution argued that while Lewis’ misappropriation of insider information was not intended to increase his estimated $6.2 billion personal fortune but rather to pay back employees or “gift” lovers and friends, it still constituted classic corporate corruption. They also argued that Lewis was wealthy enough to help out his inner circle without resorting to fraud.
In a statement following his guilty plea in January, Lewis expressed regret for not establishing formal retirement plans for his pilots.
Lewis, born in London’s East End, gained prominence in Britain due to his remarkable journey from poverty to wealth.
Since its inception in 1975, the Tavistock Group has acquired a multibillion-dollar portfolio of property, sports, banking, energy, and life sciences enterprises.
He made hundreds of millions more from currency trading in the 1980s and 1990s, but he is most known for his involvement with Premier League football club Tottenham Hotspur, where he purchased a controlling share in 2001 but has since handed over ownership to a family trust.
He owns houses in many countries, including the Bahamas, where he presently resides, a $200 million art collection, and a 98-meter, $250 million yacht that he used as collateral for a bail bond after his arrest in July.
