The Financial Conduct Authority (FCA) prosecuted Coyle after he used two online accounts in the name of his partner to trade Ocado shares, based on confidential information that the supermarket was in negotiations over a proposed joint venture with the online distribution business.
In addition to imprisonment, Coyle was ordered to pay £15,000 towards the prosecution costs and a confiscation order for £203,234.
In a case brought by the FCA, Paul Coyle, the former group treasurer and head of tax at Wm Morrison Supermarkets plc, pleaded guilty to two counts of insider dealing. Profits from the dealing exceeded £79,000.
The FCA said in a statement yesterday (March 3) “Between January 24 and May 17 2013 Coyle, through his role at Morrisons, was regularly privy to confidential price sensitive information about Morrison’s ongoing talks regarding a proposed joint venture with Ocado Group plc. Coyle took advantage of this information by trading in Ocado shares between February 12 and May 17 2013 using two online accounts which were in the name of his partner.”
Sentencing Coyle, the judge, Mr Justice Globe, said: “The offending was so serious that an immediate custodial sentence must be imposed.”
Mr Justice Globe
“The offending was so serious that an immediate custodial sentence must be imposed.”
FCA director of enforcement and market oversight Georgina Philippou added: “Mr Coyle committed a serious breach of trust by using the confidential price sensitive information he received as part of his role at Morrisons for his own personal gain.
“Abuse of inside information in this way undermines the integrity of the UK financial markets. We are committed to prosecuting insider dealing to ensure our markets remain a ‘level playing field’ for all participants.”
Lone wolf activity
A Morrisons spokesman told FoodManufacture.co.uk the prosecution resulted from lone wolf activity. “While this was a regrettable case of an individual acting alone, we are pleased that our governance and processes were sufficiently robust to enable the authorities to achieve a successful prosecution,” said the spokesman.
“We are also pleased that the case has concluded and that the FCA’s investigation did not raise wider concerns for the company.”
Coyle was charged with insider dealing in September 2014, as part of a FCA probe into markets abuse. At the time, the FSA said it had achieved 24 convictions connected to insider dealing.
Allegations against Coyle first emerged in January last year when the FCA confirmed it had arrested a 49-year old man in Halifax in connection with market abuse allegations.
The penalties for insider dealing can include a prison term of up to seven years.
Meanwhile, last week City analyst Shore Capital advised Morrisons’s new ceo David Potts to review the retailer’s partnership with Ocado.