Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Joe Lewis, the British billionaire whose family owns Tottenham Hotspur football club, has pleaded guilty to three criminal counts in an insider trading case, tarnishing the reputation of the wealthy investor.
The charges to which Lewis pleaded guilty in Manhattan federal court on Wednesday — one count of conspiracy to commit securities fraud and two counts of securities fraud, according to the US Department of Justice — carry an overall maximum potential sentence of 45 years in prison, although he is likely to get far less time when he is sentenced on March 28.
The businessman last year surrendered to US authorities after being charged with giving confidential information gleaned about public companies in which he had invested to friends, private pilots, romantic partners and others, and lending some of them hundreds of thousands of dollars to trade on the knowledge.
The tips were typically given as a form of payment or gift, prosecutors said. The 86-year-old, who initially pleaded not guilty, was released on a $300mn bond, with his 98-metre yacht Aviva and private plane put up as security.
Mark Herr, a spokesperson for Lewis, said the businessman had “acknowledged his conduct in connection with a number of stock trades by individuals close to him” but “did not engage in improper trading in his own accounts”. Lewis is “deeply sorry, embarrassed and apologises to the court, his family and all those who have come to rely on him”, he added.
On Wednesday, Broad Bay, a company owned by Lewis, also pleaded guilty in a separate case alleging it had engaged in securities fraud to conceal the size of Lewis’s stake in Mirati Therapeutics, a pharmaceutical company, from regulators.
That allowed companies he controlled to exercise warrants in the business “at vast financial gain”, the DoJ said. After Mirati shares held in offshore companies were sold in 2018, approximately $25mn was transferred to an account controlled by Broad Bay, prosecutors said.
Broad Bay and Lewis agreed to pay $50mn in financial penalties. Mirati, which was purchased by Bristol Myers Squibb in a deal announced last year, did not immediately respond to a request for comment. Under the plea agreement Lewis and his companies must resign and give up control of board of director seats of any publicly traded business in the US.
Damian Williams, the US attorney for the Southern District of New York, said in a statement that the pleas demonstrated how the “law applies to everyone, no matter who you are or how much wealth you have”. Lewis will “pay the price with a federal conviction, the prospect of time in prison, and the largest financial penalty for insider trading in a decade”, he added.
The billionaire real estate investor held a majority stake in English football club Tottenham Hotspur for more than two decades. That shareholding is now owned by a trust on behalf of his family. The Premier League side, which has repeatedly drawn interest from investors in recent years, previously described the charges against Lewis as a “legal matter unconnected with the club”.
Lewis, who was born in an east London pub in 1937, dropped out of school as a teenager and joined his family catering business. He found early success with a chain of themed restaurants before relocating from the UK in 1979 to the Bahamas.
He built a reputation in financial markets for big, speculative trades on currencies, including a profitable bet against sterling ahead of Black Wednesday in 1992, when Britain exited the European exchange rate mechanism. However, he also suffered a $1bn loss after backing Wall Street investment bank Bear Stearns ahead of the financial crisis in 2008.
Lewis is also the founder of Tavistock Group, which owns assets ranging from investments in more than 200 companies to real estate, agriculture and artworks by Pablo Picasso, Henri Matisse and Lucian Freud.
A Tavistock spokeswoman said the guilty plea had “no impact on Tavistock’s businesses in UK”.
