Sometimes, insider trading goes beyond just trading based on confidential information. It involves manipulating information for profit while also sharing it with others, causing significant impacts on the stock market.
Joe Lewis, a British billionaire and investor, has engaged in such activities on multiple occasions.
Recently, he was found guilty by US authorities for numerous instances of insider trading. He shared confidential information with his pilots, assistants, and even his girlfriend.
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As a consequence, he has been sentenced to three years of probation and a fine of $5 million.
Finbold has compiled a list detailing some of his most noteworthy insider trades and their performance.
Beef and biotech as the most notable insider trades
In 2019, as per his criminal indictment, Lewis received insider information from the Australian Agricultural’s (ASX: AAC) board of directors regarding significant losses caused by flooding, with insurance failing to cover cattle investment losses.
Lewis relayed this information to his pilots, Patrick O’Connor, and Bryan Waugh, advising them to sell their stock in the company, which lost more than 12% of its value at the time.
During the same period, he purportedly instructed his then-girlfriend, Carolyn Carter, to invest in Solid Biosciences (NASDAQ: SLDB) stock, a biotech firm, upon learning about an upcoming private investment and clinical trial.
Carter invested $700,000, almost exhausting her available funds, to acquire 150,000 shares. Subsequently, she sold the shares, yielding a profit of $849,000 at a 118% gain, as per prosecutors.
Mirati Therapeutics sold for 730% gain
Furthermore, prosecutors allege that a Mirati Therapeutics (NASDAQ: MRTX) board member, who also had ties to Lewis’ biotech hedge fund, disclosed confidential and positive results from the company’s clinical trial to Lewis.
Subsequently, Lewis instructed Carter to purchase shares in Mirati before the official result announcement.
Lewis also sold off 6.9 million shares, which were valued at approximately $400 million based on the acquisition price of $58 per share. This price represented a staggering 730% increase from Mirati’s initial trading value.
Additionally, Lewis provided $500,000 loans to each of his pilots to facilitate similar investments, as detailed in the indictment.
What is notable is that Lewis didn’t withhold information about the companies he was involved in, and shared it with his employees, and partners as a form of gifts and substitute for pension funds.
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