Tottenham Hotspur-linked billionaire and insider trading scandal

A British billionaire whose family trust owns the Tottenham Hotspur soccer club has been charged with insider trading. Joe Lewis on Wednesday pleaded not guilty to the charges and was released on $300 million bail. Lewis used a yacht and private plane as collateral for bail. Two of his pilots, Patrick O’Connor and Bryan ‘Marty’ Waugh, also pleaded not guilty to related charges and were each released on $250,000 bail. All three must remain in the United States. Let’s take a closer look at Lewis and the scandal: Who is Lewis? Lewis is said to be one of Britain’s wealthiest men, as per BBC. As per Sky News, Lewis was born into a Jewish family in London’s historic Roman Road. He dropped out of school at age 15 to help his father with his catering business Tavistock Banqueting Lewis in 1979 sold the business and then got into currency trading. In 1992, Lewis and US billionaire George Soros allegedly bet on the pound crashing out of the European Exchange Rate Mechanism (EERM) which caused the sterling to drop alarmingly.

The event would become widely known as Black Wednesday.

Lewis’ Tavistock Group has stakes in more than 200 companies around the world, according to its website, and his art collection boasts works by Picasso, Matisse, Degas and more. His business connections include Tiger Woods, Ernie Els and Justin Timberlake, with whom he built a Bahamian oceanside resort that opened in 2010. Lewis has a fortune that Forbes estimates at $6.1 billion and assets in real estate, biotechnology, energy, agriculture and more. He is currently a resident of the Bahamas, as per Sky News. What are the charges? Prosecutors have accused Lewis of “orchestrating a brazen insider trading scheme” by using his positions at various companies to pass information to his employees, friends, and lovers. “As we allege, he used insider information as a way to compensate his employees and shower gifts on his friends and lovers,” Manhattan-based US attorney Damian Williams said in a Twitter video announcing the insider trading case. “Those folks then traded on that inside information — and made millions of dollars in the stock market — because, thanks to Lewis, those bets were a sure thing,” Williams added. “That’s classic corporate corruption. It’s cheating. And it’s against the law — laws that apply to everyone, no matter who you are.” “None of this was necessary. Joe Lewis is a wealthy man,” Williams added. According to the indictment, Lewis’ investments in various companies gave him control of board seats, where he placed associates who let him know what they learned behind the scenes. Prosecutors say Lewis improperly doled out that confidential information between 2019 and 2021 to his chosen recipients and urged them to profit on it. At one point, according to the indictment, he even loaned his two private pilots $500,000 apiece to buy stock in a cancer-drug company that he knew had gotten — but not yet publicly disclosed — encouraging results from a clinical trial. “Boss is helping us out and told us to get ASAP,” the pilot texted when advising a friend to buy the stock, too, according to the filing. In later texts telling the friend about the loan, the pilot reasoned that “the Boss has inside info” and “knows the outcome.”

“Otherwise why would he make us invest,” the pilot added.

The New York Times quoted prosecutors as alleging that Lewis gave the pilots money for the trades as a “substitute for a formal retirement plan.” As per BBC, Waugh’s record for the loan – given interest-free – read “loan payback for MRTX”. This is the company for which Lewis allegedly received inside information. Lewis also gave the tip to his girlfriend, his personal assistant, a poker buddy and a friend with whom he had a romance, the indictment said. BBC reported that Lewis is accused of logging into her bank account and using all her money to invest into a company. The girlfriend is said to have emailed Lewis “all good & all confirmed” after buying and selling stock  allegedly on information he got from a visitor on his yacht. After the company announced the clinical trial data, the stock gained nearly 17 per cent in a day, and Lewis’ friends and employees all eventually sold at a profit. The pilots repaid the loans, at Lewis’ request, according to the indictment. Another time, according to the filing, Lewis gleaned some closed-door information about a muscular dystrophy drug company in which he was a major investor. The information allegedly included a planned financial move and some clinical trial news. Lewis’ biotech hedge fund signed a confidentiality agreement that prohibited disclosing the information or trading on it. But, the indictment said, he told his girlfriend to buy the company’s stock, then told the pilots the same as they flew the couple to Massachusetts from Seoul, where the two had been staying in the swanky Four Seasons Hotel. The stock price shot up after the clinical trial results and the financial move were announced, and the girlfriend more than doubled her money, netting about $850,000, according to the indictment. Yet another stock tip concerned a third pharmaceutical company, which Lewis was negotiating to acquire, the indictment said. It said Lewis advised his pilots and two personal assistants, who were working on his 98-meter (322-foot) mega-yacht, to buy in. And they did, before the merger plan became public and bumped up the stock price. On still another occasion, the indictment said, Lewis learned through a hand-picked board member that an Australian agricultural firm was bracing for significant losses from a monsoon flood. He quickly urged the pilots to sell, according to the indictment, but their broker wasn’t able to dump the shares before the company went public with the news. “Just wish the Boss would have given us a little earlier heads up,” one of the pilots lamented to the broker by email. The US Securities and Exchange Commission on Wednesday filed a civil insider trading case against Lewis O’Connor, Waugh and Lewis’ then-girlfriend Carolyn Carter. O’Connor and Waugh, who are residents of New York and Virginia, respectively, each face seven counts of securities fraud and one count of conspiracy. A lawyer for Carter, who is not facing criminal charges, did not immediately respond to a request for comment. David M Zornow, an attorney for Lewis, said his client had come to the U.S. “to answer these ill-conceived charges” and would fight them vigorously. “The government has made an egregious error in judgment in charging Mr. Lewis, an 86-year-old man of impeccable integrity and prodigious accomplishment,” Zornow said in a statement Tuesday. Wearing a grey three-piece suit, Lewis said, “Not guilty, your honour,” when asked for his plea. He and his lawyers declined to comment as they left court and hailed a yellow cab. Lewis and Tottenham Hotspur Lewis bought an interest in Tottenham Hotspur, one of England’s most storied soccer clubs, in 2001. Lewis paid Alan Sugar $28 million for a controlling interest in Tottenham, as per Sky. Under his ownership, the Premier League club built a state-of-the-art stadium at an estimated cost of more than $1 billion. [caption id=“attachment_12924312” align=“alignnone” width=“640”] Tottenham Hotspur logo.[/caption] It features an NFL field below the moveable soccer pitch, as Tottenham has a long-term agreement with the NFL to stage regular-season games in London. Spurs also was among teams involved in 2021 in the aborted plan for a European Super League, which prompted widespread protests from supporters.

But Lewis does not own Tottenham Hotspur himself.

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Instead, a trust benefiting members of Lewis’ family is the majority owner of ENIC – the holding company that owns the team. Corporate filings show Lewis surrendered ‘operational control’ of the club last October. As per The Guardian, two Bahama-based lawyers have been appointed trustees to run the club for his family. A source close to Lewis told the newspaper the changes to the club’s ownership were made well before he became aware of that prosecutors were getting ready to charge him. The source noted Lewis has also made similar changes to his other investments. “It’s in line with what most rich 86-year-olds would do,” the source added. It is important to note that the indictment makes no mention of Tottenham. The club has distanced itself from Lewis. “This a legal matter unconnected with the club, and as such we have no comment,” the club said in a statement as per The New York Times. BBC quoted Tottenham Hotspur as saying Lewis is “no longer a person with significant control at the club”. With inputs from agencies