City dealer faces jail for insider dealing

A City banker known as The Walrus was today convicted of insider trading to make a fortune for himself and old school friends by rigging bets on the stock market.

Asif Butt, 35, who earned ?90,000 a year from bank Credit Suisse First Boston, was responsible for blocking information leaks but used secret company knowledge to net massive spread-bet wins.

The addicted gambler fed tips to friends for bets of up to ?600,000, often minutes before major financial announcements were made.

Butt was charged with making at least ?265,000 for his gang, but detectives believe the true figure could run into millions.

He faces a maximum jail sentence of seven years and is the first person from a " compliance control room" to be convicted of insider trading. A jury at Southwark Crown Court took more than 14 hours over four days to find Butt and four others guilty.

During the trial the court heard that Butt had taken between 50 and 80 per cent of the winnings from the scheme, dealing a heavy blow to the "reputation of the highlyregulated London stock market".

Among the highly confidential material passed on to the syndicate was information about the Royal Bank of Scotland takeover of NatWest, as well as data about EMI, Johnson Matthey, United News & Media, Chubb, property firm Grantchester and insurance broker Sedgwick.

Butt told the jury he was a regular at the Golden Nugget casino in Soho, where he was once so desperate to get in that he swapped his trainers for a tramp's filthy shoes to meet the dress code. He went on to win ?10,000 on blackjack tables wearing the vagrant's brogues, he boasted.

He admitted passing on secrets but claimed spread betting on inside information was legal. Judge Christopher Elwen described this as a flawed defence, pointing out that the price of shares involved in the spread bets which Butt told his friends to make was affected by the inside information he held.

Butt was sacked from the investment bank in January

2002. Butt, of Garston, Hertfordshire, chartered accountant Ian Beale, 39, Alexander Coleman, 34, Richard Rudson, 38, and Daniel Masters, 32, all of Watford, were found guilty of conspiracy to commit insider trading between 31 July, 1998 and 17 January, 2002.

They were bailed until sentencing on 28 January.