The FCA has started criminal proceedings against former flatmates Bobosher Sharipov and Bekzod Avazov for insider dealing over a takeover deal.
The defendants had their first appearance today at Westminster Magistrates Court.
Mr Sharipov, 43, worked at investment bank Jefferies International Limited (Jefferies) and advised GCP Student Living Plc (GCP) on a potential takeover.
He is charged with leaking confidential inside information about the takeover to his close friend and business associate, Mr Avazov.
Mr Avazov, 43, is alleged to have used that confidential inside information to trade in GCP shares and spread bets to make a profit of almost £70,000. The alleged offending took place in 2021.
The FCA’s specialist market monitoring systems identified Mr Avazov’s trades as suspicious given the timing and profit.
FCA analysis of public records uncovered that Mr Sharipov and Mr Avazov were former colleagues and flatmates.
Steve Smart, executive director of enforcement and market oversight at the FCA, said:
“We believe that Mr Sharipov took advantage of his position so he and his friend Mr Avazov could benefit through committing crime and gaming the system. The integrity and cleanliness of our markets rely on trust. It is right that this case is heard by the courts.”
The case was formally sent to Southwark Crown Court. Neither defendant indicated a plea.
Mr Sharipov has been charged with insider dealing contrary to 52(2)(b) of the Criminal Justice Act 1993 (improper disclosure of inside information). Mr Avazov has been charged with insider dealing contrary to section 52(1) of the Criminal Justice Act 1993 (dealing in price-affected securities in relation to inside information).
The regulator said that Jefferies has co-operated fully with the FCA’s investigation.
Insider dealing is punishable by a fine and/or up to seven years’ imprisonment for offences that occurred during the period of these alleged offences. For offences committed on or after, 1 November 2021, the maximum sentence for insider dealing is a fine and/or up to 10 years’ imprisonment.
Last month former adviser Neil Sedgwick Dwane was fined £100,281 for insider dealing and banned from working for UK financial services.
The FCA said it continues to use its full range of powers to clamp down on all types of market abuse, using the most appropriate regulatory and criminal action to hold people to account. It said tackling financial crime is a priority under the FCA's 5-year strategy.
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