Ex-Schroders Trader Clarke Pleads Guilty to Insider Dealing

The 40-year-old pleaded guilty in a London court to using confidential information between 2003 and 2012 to make $200K from trading shares of nine companies.

(Bloomberg) — Damian Clarke, a former equities trader at Schroders Plc in London, pleaded guilty to nine counts of insider trading, giving the U.K. Financial Conduct Authority another victory just a week before he was to start his trial.

The 40-year-old pleaded guilty in a London court Tuesday to using confidential information between2003 and 2012 to make 155,162 pounds ($220,000) from trading shares of nine companies including software maker Autonomy Corp. Hell be sentenced in June after a medical assessment. He has been struggling with a number of serious mental and physical conditions over the last few years, according to testimony.

The FCA started to crack down on insider trading after the 2008 financial crisis. Before that,it hadnt prosecuted anyone for the offense, choosing instead to use civil penalties such as fines and bans. Since 2009, the regulator has secured 28 convictions for the offense, which carries a maximum sentence of seven years in the U.K.

Insider dealing is a dishonest crime, not a means for City professionals to make money on the side,Mark Steward, director of enforcement and market oversight at the FCA, said in a statement. Clarke abused the trust that came with a City career by cheating the system and, in doing so, he let down the expectations of the whole community.

Trial Looming

Clarke and four others were arrested in January 2013. After an original plea of not guilty in October 2014 he changed his position on seven of the nine last July. He plead guilty to the final two charges Tuesday, less than a week before his trial was scheduled to begin. The FCA discontinued its investigation against the other four arrested.

Clarke, who lives with his family in Lincolnshire, England, was wearing a dark blue suit in court and only spoke to confirm his name and pleas. He was released on bail until his sentencing.

Clarke started as a fund managers assistant at Schroders and became an equities trader in 2006, according to the FCA.

He received non-public information about companies, which he used toplace trades in accounts both in his name and those of close family members, the FCA said. He also admitted to trading shares of homebuilder Swan Hill Group Plc, and plumbing and heating provider BSS Group Plc, software company Marlborough Stirling Plc, Eidos Plc, NeuTec Pharma Plc, Retail Decisions Ltd., Invensys Ltd., and Raven Mount Group Plc.

These proceedings relate entirely to his personal actions, Schroders said in an e-mailed statement. The bank has not been subject to any investigation, and has provided full co- operation to the FCA throughout this matter. There is no indication of any detrimental impact on our clients or financial results.