Federal prosecutors charged Joseph C Lewis, the British billionaire who owns the Tottenham Hotspur English soccer club, with insider trading, accusing him of illegally funneling nonpublic information to associates to trade on.
In a 29-page indictment, prosecutors in Manhattan on Tuesday accused the 86-year-old financier of doling out tips to friends and associates, including his pilots, personal assistants and romantic partners from 2019 to 2021.
“He used inside information as a way to compensate employees and shower gifts on friends and lovers,” Damian Williams, the US Attorney for the Southern District of New York, said in a statement. “It’s cheating and against the law.”
According to the indictment, Lewis took information about several publicly traded companies, gleaned from his various investment vehicles, and urged employees to trade on them.
In one case, he learned about promising clinical trial data at Mirati Therapeutics, a pharmaceutical company, through a hedge fund he controlled. He then urged a girlfriend, a personal assistant and two pilots to buy Mirati shares before the news was published — and, in the case of the pilots, lent each $500,000 to enable them to acquire more shares, according to the indictment.
In a text to a friend, according to the indictment, one of the pilots wrote that he believed that “the Boss has inside info,” because “otherwise why would he make us invest.”
Federal prosecutors in Manhattan also charged his two pilots, Patrick O’Connor and Bryan Waugh, with securities fraud for making profitable trades on the tips.
The Securities and Exchange Commission has filed a civil complaint against the three men and a former girlfriend of Lewis. The SEC said the pilots and former girlfriend made more than $545,000 in trading profits.
Regulators said Lewis lent the pilots to money to make trades as a “substitute for a formal retirement plan.”
Prosecutors also accused Lewis of conspiring to disguise the size of his stake in Mirati between 2013 and 2018 through a series of shell companies, including one purportedly created for the benefit of his granddaughter; and of making false statements to the Securities and Exchange Commission. Those fraudulent filings, according to the indictment, allowed him to exercise stock warrants that were otherwise unavailable.
A lawyer for Lewis, David Zornow, said that prosecutors had “made an egregious error in judgment in charging Mr. Lewis, an 86-year-old man of impeccable integrity and prodigious accomplishment.” Zornow added that his client had gone to the United States voluntarily to respond to the charges and planned to fight them in court.
Attorneys for O’Connor and Waugh were not immediately available for comment.
The three men appeared on Wednesday in US District Court in Manhattan, where Lewis’ bail was set at $300 million. His travel restrictions bar him from boarding his yacht, and require advising authorities if it is moved.
From his home bases in the Bahamas, Florida and Argentina, Lewis owns the Tavistock Group, a vast web of businesses across 13 countries, including the Mitchells & Butlers chain of pubs, country clubs and hotels.
Among his crown jewels is a majority stake in Tottenham, the English Premier League soccer club in north London that Lewis took control of in 2007. A family trust associated with Lewis owns a majority stake in ENIC, the corporate entity that owns a majority of Tottenham’s shares.
On Wednesday, Tottenham said, “This a legal matter unconnected with the club and as such we have no comment.”
Lewis amassed a fortune from decades of currency trading, speculating on movements of the British pound — teaming up with George Soros in 1992 to mint huge profits — and the Mexican peso. Bloomberg has estimated his net worth at more than $6.5 billion.
Lewis grew up above a pub in London’s East End and helped transform his father’s catering company into a chain of themed restaurants. By age 15 he had dropped out of school to focus full-time on business, and after selling the restaurant business moved to the Bahamas as a way to avoid taxes.
For much of his career he has stayed below the radar, seemingly content to bet on real estate and play golf. But he has occasionally struck high-profile deals. In the 1990s, he bought a nearly 30 per cent stake in Christie’s, the auction house, before selling that investment to François Pinault, a French luxury mogul.
And in 2007, Lewis emerged as an investor in Bear Stearns, spending more than $1 billion to accumulate a nearly 10 per cent stake in the investment house over a matter of months. The timing of his bet proved terrible, however. In 2008, as the financial crisis unfolded, Bear Stearns was forced to sell itself to JPMorgan Chase for $10 a share. (Lewis had paid as much as $110 a share.)
Lewis is also a high-powered art collector, who has owned pieces by Picasso, Matisse, David Hockney and more. Among his most prominent holdings are the original sculpture and several copies of “Charging Bull,” the iconic bronze ode to capitalism near Wall Street.
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