British billionaire Joe Lewis, 87, was sentenced to three years of probation and a $5 million fine after pleading guilty to insider trading charges in New York. The charges stemmed from Lewis repeatedly sharing confidential information about publicly traded companies with his girlfriend, personal pilot, employees, and friends. Lewis did not personally trade or financially benefit from the information shared. Prosecutors argued for a lenient jail sentence, citing Lewis’s age, medical issues, and cooperation with the investigation as reasons to impose a penalty less than federal sentencing guidelines recommended.
Despite arguing for a lighter sentence, prosecutors slammed Lewis for his insider trading activities, describing them as a “troubling pattern of misconduct over the course of several years.” Lewis admitted in January to knowing that his actions were wrong and expressed embarrassment. Some of those he shared the information with, including pilots Patrick J. O’Connor and Bryan L. Waugh, and his former girlfriend Carolyn W. Carter, did benefit financially from the insider information. Broad Bay Ltd., one of Lewis’s companies, also pleaded guilty to securities fraud and agreed to pay a $50 million penalty, the largest financial penalty for insider trading in a decade.
Lewis, who has an estimated net worth of $6.2 billion, is best known for his association with the Tottenham Hotspur Premier League club. He founded the Bahamas-based Tavistock Group in 1975 and has investments in various companies including the Australian Agricultural Company and U.K. pub operator Mitchells & Butlers. Court filings revealed that Lewis has indulged in luxury purchases such as a $250 million yacht, a $90 million private plane, and an art collection worth $100 million. If sentenced to prison time, Lewis would have been the oldest white-collar criminal to ever be put behind bars.
Prosecutors argued in court filings that Lewis believed he was above the law and operated with a level of wealth and stature that exempted him from abiding by the same rules as everyday investors. Despite his plea of guilt, Lewis did not personally benefit financially from the insider information but was motivated by “hubris and childish exuberance.” Lewis’s age, medical issues, damage to his reputation, and cooperation with the investigation were all factors considered in the sentencing decision. In addition to the probation and fine, Lewis will also face restrictions on his business activities in the future.
In a further blow to Lewis, Forbes estimated him as the 470th richest person in the world as of the sentencing. The case brought by the Securities and Exchange Commission against Lewis and his associates, including pilots O’Connor and Waugh, and former girlfriend Carter, was stayed in September. Lewis’s guilty plea to insider trading highlights the risks and consequences of sharing confidential business information for personal gain, even for wealthy individuals like himself who may believe they are exempt from legal consequences.
