05 April 2024 , 08:45
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British billionaire Joe Lewis, 87, was sentenced to three years of probation Thursday after pleading guilty to insider trading charges in New York and admitting to sharing business secrets with personal friends, multiple sources reported—in a sentence that also includes a $5 million fine and restrictions on his business activities for years to come.
Lewis was sentenced by federal judge Thursday afternoon after admitting to "repeatedly" passing information about four publicly traded companies to his girlfriend, personal pilot, employees and friends, though he did not personally trade or financially benefit from the information shared.
Lewis’s age, medical issues, damage to his reputation and cooperation with the investigation (he willingly returned to the United States from England to face charges for his crimes) were all cited by prosecutors in court filings in the Southern District of New York as reasons to impose a penalty less than the 18 to 24 months of prison time called for in federal sentencing guidelines.
While a judge ultimately made the decision, prosecutors argued in advance that Lewis should receive a lenient jail sentence and said that punishment for his crimes would come “in many forms,” suggesting a $5 million fine and future restrictions on his business activity would suffice.
Broad Bay Ltd., one of Lewis’ companies, also pleaded guilty to securities fraud in the case and agreed to pay a $50 million penalty, called "the largest financial penalty for insider trading in a decade” by the Associated Press.
Despite arguing for a lighter sentence, prosecutors in the court submission Monday still slammed the private investment billionaire and said his insider trading was “not the result of aberrant, one-time conduct, but rather, a troubling pattern of misconduct over the course of several years.”
“It is clear that Lewis believed he was above the law, that he had achieved a level of wealth and stature that relieved him from having to operate by the same rules that apply to everyday investors,” Damian Williams, U.S. Attorney for the Southern District of New York, wrote in the court filing.
Lewis, who has an estimated net worth of $6.2 billion, pleaded guilty to insider trading in January and, at the time of his plea, said he knew “what I was doing was wrong, and I’m so embarrassed." In the pre-sentencing court filing, prosecutors pointed out that Lewis did not personally trade based on inside information and did not make any money from sharing the secrets, but was instead motivated by “hubris and childish exuberance.” Some of those he shared the secrets with did benefit from the information, including pilots Patrick J. O’Connor and Bryan L. Waugh and Lewis’s former girlfriend, Carolyn W. Carter, who allegedly profited more than $545,000 from trades made off the insider information. A July case brought by the Securities and Exchange Commission, which also charged O’Connor, Waugh and Carter, was stayed in September.
Lewis, who is most known for his association with Tottenham Hotspur Premier League club, is a self-made billionaire, ranked as the 470th richest person in the world as of Thursday. He founded the Bahamas-based Tavistock Group in 1975 and investments have included the Australian Agricultural Company, Poland Land Co., Freebirds World Burrito and U.K. pub operator Mitchells & Butlers. According to court filings, he has used his wealth for purchases like 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 have been put behind bars, according to Fortune. Adelphia Communications Corp. CEO John Rigas and Boston Capital Ventures founder Harald Joachim von der Goltz, who were both sentenced to prison time when they were 83 years old, are the oldest to have been incarcerated for financial crimes.