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.
Mr Lewis pleaded guilty to three counts of securities fraud 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.
Mr Lewis, who is widely known for his association with North London Premier League football club, Tottenham Hotspur, spoke softly as he answered a series of questions from the judge. He said he had been under the care of doctors for “multiple situations.” His lawyer David Zornow said he had no doubts whatsoever about Mr Lewis’s 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 has a net worth of $7.6 billion (€7 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.
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Mr Lewis passed on material non-public information about four publicly traded companies, including Australian Agricultural 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, Mr Lewis told Judge Jessica Clarke. “I knew at the time what I was doing was wrong and I’m so embarrassed.”
The plea deal will likely drastically reduce any sentence for Mr Lewis, who faced as long as 45 years in prison. Mr Zornow said that Mr Lewis waived his right to appeal unless he is sentenced to jail time.
Mr Lewis, Ms Carter, Mr Waugh and Mr O’Connor were also sued by the US Securities and Exchange Commission.
In 2019, according to the indictment, Mr 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. Mr Lewis passed on the information to Mr O’Connor and Mr Waugh and urged them to sell their stock in the company.
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 $700,000 – “nearly all of her available funds” – to purchase 150,000 shares, according to the indictment. She sold the shares and made a $849,000 profit, prosecutors said.
On another occasion, prosecutors say, a Mirati Therapeutics board member, who also worked at Mr Lewis’s biotech hedge fund, told the billionaire about confidential, positive results from the company’s clinical trial. Mr Lewis then told Ms Carter to buy shares in Mirati ahead of the result announcement. He also lent his pilots $500,000 each to make similar investments, the indictment states.
The plea overshadows what has otherwise been a lengthy and successful career for Mr Lewis. Born and raised in the UK, he turned his father’s catering business into a chain of themed restaurants before pivoting to currency trading in the late 1970s. He moved to the Bahamas to avoid UK taxes and made hundreds of millions betting against the British pound and Mexican peso in the 1990s.
He diversified into real estate and other investments with the formation of Bahamas-based investment vehicle, Tavistock Group. – Bloomberg
