In New York on Wednesday, Joe Lewis, the British billionaire and owner of the Tottenham Hotspur soccer club, entered a plea of not guilty to insider trading charges. The allegations against him claim that he disclosed confidential corporate information to various individuals, including romantic partners, personal assistants, friends, and pilots. These individuals reportedly made millions of dollars illegally through this information.
After pleading not guilty in Manhattan federal court, Lewis was released on $300 million bail, securing it with assets such as a yacht and private plane. His pilots, Patrick O’Connor and Bryan ‘Marty’ Waugh, also pleaded not guilty to related charges and were released on $250,000 bail each.
As a condition of their release, all three individuals are required to stay in the United States.
U.S. Attorney Damian Williams made a video announcement on Tuesday night, revealing the charges against Joe Lewis. According to Williams, Lewis is accused of masterminding a bold insider trading scheme. He allegedly used his privileged access to corporate boardrooms to provide inside information to friends and romantic partners, enabling them to profit illegally from this confidential information.
U.S. Attorney Damian Williams asserted that the individuals who received inside information from Lewis used it to make substantial profits in the stock market, essentially guaranteeing their bets thanks to the privileged information. Williams categorized this behavior as classic corporate corruption, cheating, and a violation of the law, emphasizing that the laws apply to everyone, regardless of their status.
In response to the charges, David M. Zornow, Lewis’ attorney, stated that his client had willingly come to the U.S. to confront these allegations and would vigorously contest them. Zornow strongly defended Lewis, describing him as an 86-year-old man of exceptional integrity and remarkable achievements.
During the court appearance, Lewis, dressed in a gray three-piece suit, firmly pleaded “Not guilty, your honor” in response to the charges. After the proceedings, both Lewis and his legal team chose not to comment as they left the courtroom and hailed a yellow cab.
As of now, the lawyers representing the pilots charged alongside Joe Lewis have not responded to messages seeking comment.
Joe Lewis faces a total of 16 counts of securities fraud and three counts of conspiracy, while the pilots, Patrick O’Connor and Bryan ‘Marty’ Waugh, face seven counts of securities fraud each and one conspiracy count.
With a net worth estimated at $6.1 billion by Forbes, Lewis possesses a diverse range of assets in real estate, biotechnology, energy, agriculture, and more. He acquired a stake in Tottenham Hotspur, a renowned English soccer club, in 2001. During his ownership, the Premier League club constructed a state-of-the-art stadium at a cost exceeding $1 billion.
At present, a trust established for the benefit of Lewis’ family members is the majority owner of ENIC, the holding company that possesses the soccer team. Notably, Lewis himself is not a beneficiary of this trust and reportedly surrendered operational control of the club in October of the previous year, as documented in corporate filings.
Joe Lewis’ Tavistock Group has significant stakes in over 200 companies worldwide, as stated on its website. His impressive art collection includes works by renowned artists such as Picasso, Matisse, and Degas, among others. Lewis is well-connected in the business world, with associations with prominent figures like Tiger Woods, Ernie Els, and Justin Timberlake. Together with Timberlake, he co-developed a luxurious oceanside resort in the Bahamas, which opened its doors in 2010.
The indictment reveals that Lewis used his investments in various companies to gain control of board seats. He strategically placed associates in these positions, allowing him to receive privileged information behind the scenes. Between 2019 and 2021, Lewis allegedly distributed this confidential information to his chosen recipients, encouraging them to profit unlawfully from it.
According to the court documents, Lewis even provided $500,000 each as loans to his two private pilots so they could purchase stock in a cancer drug company. Lewis was aware of positive results from a clinical trial that had not been publicly disclosed yet. O’Connor, one of the pilots, texted a friend about the loan, mentioning that the “Boss” was assisting them and that all conversations on the app were encrypted.
Lewis also shared the confidential tip with his girlfriend, personal assistant, a poker buddy, and a friend with whom he had a romantic relationship. When the company eventually announced the clinical trial data, the stock price surged nearly 17% in one day, resulting in substantial profits for Lewis’ friends and employees. The pilots repaid the loans at Lewis’ request, as stated in the indictment.
According to the filing, there was another instance where Joe Lewis obtained confidential information about a muscular dystrophy drug company in which he had significant investments. The information reportedly consisted of details about a planned financial transaction and some undisclosed clinical trial updates.
Despite his biotech hedge fund being bound by a confidentiality agreement that prohibited sharing or trading based on such information, Lewis allegedly instructed his girlfriend to purchase the stock of the said company. Subsequently, he relayed the same information to the pilots while they were flying the couple from Seoul to Massachusetts, where they had been staying.
These actions, as described in the indictment, suggest that Lewis utilized his access to inside information for personal gain and knowingly disregarded the legal and ethical boundaries related to confidential data in the financial market.