AIM day traders Matthew West and his broker Nikolas have been given suspended prison sentences, community service orders and ordered to repay more than £280,000 after being found guilty of insider trading.
Matthew West, self-employed as a professional trader, was sentenced to 15 months’ imprisonment, suspended for two years, and given 200 hours of unpaid work.
After initially receiving inside information, as he was regularly approached by legitimate broker contacts with investment opportunities subject to strict confidentiality agreements, often related to upcoming capital raising plans, Matthew unlawfully shared and used the information to trade before the announcements were made public.
With Matthew making most of the trades, Nikolas received a six-month sentence, suspended for 12 months.
Market surveillance systems run by the Financial Conduct Authority (FCA) detected suspicious trades linked to confidential investment opportunities on the AIM in four companies: Proactis Holdings in November 2016, Palace Capital between September and October 2017, Concha Plc in September 2017 and Bushveld Minerals Ltd in 2018.
An investigation found the brothers coordinated trades within minutes of receiving inside information, generating nearly £43,000 in profit.
However, the court calculated confiscation orders at £181,615 for Matthew and £102,150 for Nikolas, based on the full value of trades adjusted under the Proceeds of Crime Act 2002. Both must pay in full within 14 days or face additional prison terms.
In his remarks, Judge Christopher Hehir said: “Markets cannot operate fairly if they are rigged by dishonest operators. Grave economic harm may result, so deterrence is important.”
Steve Smart, FCA executive director of enforcement and market oversight, said: “Greed got the better of them. The West brothers knew the rules and still chose to break the law,” said .
The FCA noted that the offences predate 1 November 2021, when the maximum sentence available increased to 10 years.
Earlier this summer, the FCA also succeeded in bringing a case against Redinel Korfuzi and his sister Oerta Korfuzi, sentenced to six years and five years imprisonment respectively for insider dealing where they made a profit of almost £1 million.
Redinel took advantage of his position as a research analyst at Janus Henderson and shared confidential information with his sister Oerta to trade, making trades in at least 13 stocks between December 2019 and March 2021.