Billionaire pleads guilty in insider trading case with a link to an Australian giant

By Ava Benny-Morrison

British billionaire Joe Lewis pleaded guilty to passing inside information to his private pilots and girlfriend, putting a black mark on the 86-year-old investor’s otherwise spectacular rise from London’s East End to one of Britain’s richest men.

Lewis pleaded guilty to three counts of securities fraud, including conspiracy, at a hearing in federal court in Manhattan on Wednesday. The plea comes six months after the Bahamas-based octogenarian was charged with more than a dozen counts, including securities fraud.

“I’m so embarrassed”: Joe Lewis’ plea deal will likely drastically reduce any sentence for the billionaire, who faced as long as 45 years in prison.
“I’m so embarrassed”: Joe Lewis’ plea deal will likely drastically reduce any sentence for the billionaire, who faced as long as 45 years in prison.Credit: Bloomberg

Lewis spoke softly as he answered a series of questions from the judge, saying that he had been under the care of doctors for “multiple situations.” His attorney David Zornow said he had no doubts whatsoever about Lewis’ competence.

The founder of investment firm Tavistock Group, which has stakes in more than 200 companies, including luxury hotels, resorts and sports, is the 316th-richest person in the world. He is well-known for his ties to the Tottenham Hotspur, which a Lewis family trust has a controlling interest in. Lewis has a net worth of $US7.6 billion ($11.5 billion), according to the Bloomberg Billionaires Index, and was the most high-profile figure to be prosecuted for insider trading by federal prosecutors in Manhattan last year.

Lewis passed on material non-public information about four publicly traded companies, including Australian cattle giant Australian Agricultural Co. and Mirati Therapeutics, to his pilots, Bryan Waugh and Patrick O’Connor and former girlfriend Carolyn Carter between 2019 and 2021, prosecutors said. The pilots were also indicted for securities fraud last year, but did not appear in court on Wednesday.

“While I possessed material non-public information about certain publicly traded companies, I agreed to make recommendations” to three other people to purchase stock in those companies, Lewis told Judge Jessica Clarke.

“I knew at the time what I was doing was wrong and I’m so embarrassed.”

One of Lewis’ companies, Broad Bay Limited, also pleaded guilty to securities fraud and agreed to pay a $US50 million penalty in a deal struck with prosecutors.

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The plea deal will likely drastically reduce any sentence for Lewis, who faced as long as 45 years in prison. Zornow said that Lewis waived his right to appeal unless he is sentenced to jail time. The attorney asked for the sentencing process to be expedited given the businessman’s age. Lewis, who was slowly guided out of the courthouse by his supporters, will face court again on March 28.

Lewis, Carter, Waugh and O’Connor were also sued by the US Securities and Exchange Commission.

In 2019, according to the indictment, Lewis learned from Australian Agricultural’s board of directors that the beef producer had suffered huge losses due to flooding and that insurance wouldn’t cover its cattle losses. Lewis passed on the information to O’Connor and Waugh and urged them to sell their stock in the company.

Joe Lewis is well known for his ties to Premier League club Tottenham.
Joe Lewis is well known for his ties to Premier League club Tottenham.Credit: Getty Images

In the same year, he allegedly told his girlfriend in South Korea to purchase shares of Solid Biosciences, a biotech company, after learning about an upcoming private investment and clinical trial. The girlfriend paid $US700,000 — “nearly all of her available funds” — to purchase 150,000 shares, according to the indictment. She sold the shares and made a $US849,000 profit, prosecutors said.

On another occasion, prosecutors say, a Mirati Therapeutics board member, who also worked at Lewis’ biotech hedge fund, told the billionaire about confidential, positive results from the company’s clinical trial. Lewis then told Carter to buy shares in Mirati ahead of the result announcement. He also loaned his pilots $US500,000 each to make similar investments, the indictment states.

The plea overshadows what has otherwise been a lengthy and successful career for Lewis. Born and raised in the UK, Lewis turned his father’s catering business into a chain of themed restaurants before pivoting to currency trading in the late 70s. He moved to the Bahamas to avoid UK taxes and made hundreds of millions betting against the British pound and Mexican peso in the 90s.

He diversified into real estate and other investments with the formation of Bahamas-based investment vehicle, Tavistock Group.

Lewis is best known in England through his ownership of Tottenham Hotspur Football Club, one of the teams that originally agreed to join the European Super League before pulling out after a public outcry.

Lewis ceased to be a person with significant control in Tottenham in October 2022. ENIC Group, with majority control held by a Family Discretionary Trust of which Lewis is not a beneficiary, is Tottenham’s owner, rather than Lewis.

Bloomberg

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