R v McQuoid
| Jurisdiction | England & Wales |
| Judge | THE LORD CHIEF JUSTICE |
| Judgment Date | 10 June 2009 |
| Neutral Citation | [2009] EWCA Crim 1301 |
| Court | Court of Appeal (Criminal Division) |
| Docket Number | No. 2009/01992/A2 |
| Date | 10 June 2009 |
[2009] EWCA Crim 1301
IN THE COURT OF APPEAL CRIMINAL DIVISION
Before: The Lord Chief Justice of England and Wales
(Lord Judge)
Mr Justice Collins
and
Mr Justice Owen
No. 2009/01992/A2
Mr J M Caplan QC and Mr G Summers
appeared on behalf of the Applicant
Mr M Bowes QC appeared on behalf of the Crown
Wednesday 10 June 2009
THE LORD CHIEF JUSTICE:
Christopher McQuoid is 45 years of age, a man of good character with small dependent children. On 27 March 2009, in the Crown Court at Southwark, before His Honour Judge Testar and a jury, he was convicted of a single count of insider dealing.
The indictment alleged that he, together with James William Melbourne,
“on the 30th day of May 2006, each being an individual who had information as an insider which related to a particular issuer of securities, namely a proposed takeover of TTP Communications Plc, acquired on a regulated market, namely the London Stock Exchange, 153,824 shares in TTP Communications Plc, that were price affected securities in relation to that information.”
On 30 March 2009 he was sentenced to eight months' imprisonment. Subsequent proceedings have resulted in a confiscation order in the sum of £35,000 and an order that he pay £30,000 towards the costs of the prosecution. The appellant's application for leave to appeal against sentence was referred by the Registrar to the full court. We grant leave.
The co-accused, James William Melbourne, is the appellant's father-in-law. He was born in 1933. He, too, was convicted of insider dealing on the same count on the indictment. He was sentenced to eight months' imprisonment. However, that sentence was suspended for twelve months and there was a residence requirement.
The appellant is a solicitor and former General Counsel of TTP Communications Plc. In the course of his employment he became party to inside information about a proposed takeover by Motorola Plc. He passed the information which came to him on 11 May 2006 to Melbourne. Through Melbourne he procured the purchase of just under 154,000 shares in the company at 13 pence per share on 30 May 2006. The sum paid in total was £20,310.60.
On 1 June 2006 the takeover was made public to the market. The offer price stood at 45 pence per share. Accordingly the profit on the purchase of the shares was £48,919.20. On 1 September 2006 a blank cheque for £24,459.60 (precisely half that amount) was given to the appellant by Melbourne. The appellant filled in his own name as the payee and the cheque was paid into his bank account.
In passing sentence the judge observed that the offence committed by the appellant was not to be treated as a victimless crime. We agree. The person who sold the shares in TTP at 13 pence may have been determined to sell on that date at that price, or at any price. However, he would not have sold at that price if he had known that the takeover was already agreed and would become public within 48 hours. But, as is always the case, only those very few people on the inside knew exactly what was going on.
Insider dealing has been an offence in England and Wales since 1980. The current offence is created in Part V of the Criminal Justice Act 1993, which replaced the Company Securities (Insider Dealing) Act 1985, which in turn replaced similar provisions contained in sections 68 to 73 of the Companies Act 1980. Those who involve themselves in insider dealing are criminals: no more and no less. The principles of confidentiality and trust, which are essential to the operations of the commercial world, are betrayed by insider dealing and public confidence in the integrity of the system which is essential to its proper function is undermined by market abuse. Takeover arrangements are normally kept secret. Very few people are permitted to have advance knowledge of them. Those who are entrusted with advance knowledge are entrusted with that knowledge precisely because it is believed that they can be trusted. When they seek to make a profit out of the knowledge and trust reposed in them, or indeed when they do so recklessly, their criminality is not reduced or diminished merely because they are individuals of good character.
In the present case, as a result of this breach of trust, the appellant made a substantial profit for himself and a similar profit for his father-in-law. It is true that only one transaction was involved, but the profit arising from his single act of dishonesty was virtually £50,000. This fact demonstrates (if it needs to be demonstrated) that profits from even a single transaction of insider dealing can be very high indeed. We therefore emphasise that this kind of conduct does not merely contravene regulatory mechanisms. If there ever was a feeling that insider dealing was a matter to be covered by regulation, that impression should be rapidly dissipated. The message must be clear: when it is done deliberately, insider dealing is a species of fraud; it is cheating. Prosecution in open and public court will often, and perhaps much more so now than in the past, be appropriate. Although those who perpetrate the offence may...
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