CSFB betting ring denies abuses

A BETTING ring accused of insider trading had no idea that information leaked to it by former Credit Suisse First Boston compliance officer Asif Butt was confidential, a court has heard.

Butt, giving evidence this week in a trial in which he and four others are accused of market abuse, has admitted passing on supposedly confidential information to the co-accused but is arguing that he was not breaching criminal law. Butt, Ian Beale, Richard Rudson, Daniel Masters and Alexander Coleman deny the insider trading charges.

They are alleged to have made hundreds of thousands of pounds using spread bets to gamble on share-price movements based on information given to them by Butt. He has admitted that the first of 19 alleged offences of insider trading took place three weeks after he was recruited by CSFB.

Southwark Crown Court heard Butt admit he had access to supposedly confidential material contained on the CSFB 'watch list' of looming mergers and acquisitions and profit warnings, and that he passed it on. However he denied that his co-accused knew of the sensitivity of the material, or that what he did was illegal.

Butt told the court he had completed his exams as a solicitor and his interpretation of the Criminal Justice Act was that spread betting based on insider information was not illegal, because it did not take place on a stock exchange.

The spread betting took place between July 1998 and 17 January 2002 - a period when, Butt claims, spread betting was outside the remit of regulations on insider trading. A legal ruling in March this year decided that spread betting came under insider dealing legislation.

He said the spread bets he made constituted a breach of trust with his employer but were 'a risk I took with my employer'.

Butt also said he was addicted to betting. He was a regular at the Golden Nugget casino in Soho. One night after a drinking session with friends he was barred from entry to the casino because he was wearing trainers.

However, he found a tramp, changed shoes with him, and gained entry to the club where he then won £10,000 on blackjack.

He had formerly worked in a compliance capacity at Dresdner Kleinwort Wasserstein and Deloitte. After joining CSFB, he rose to vicepresident on a salary of £90,000. The case continues.