(Bloomberg) —One of the traders on trial in the U.K.s biggest ever insider trading probe said he spoke to journalists at the Financial Times and Daily Mail newspapers to try to get clues on what they would be publishing the following day.
Iraj Parvizi, 50, who is known in gambling circles as the Mad Punter due to his willingness to wager on anything, told the jury that his most successful strategy involved calling his sources at the British papers and trying to figure out what they were working on.
The way it works is, I need information, they need information, Parvizi explained on his first day testifying in a London courtroom. If I bought today and the Mail writes something tomorrow, the share price goes up 2 percent to 5 percent. He said he could tell from the discussions they had and what they were asking what they were likely to print.
Our journalists do not offer tips to sources or market participants,said Financial Times spokeswoman Kristina Eriksson. Such activity would be illegal. Parvizi said he read into journalists conversations to understand which stories were likely to make the news, she said.
Daily Mail spokesman Oliver Lloyd said it would be inappropriate for the newspaper to comment during the trial.
Biggest Ever
The Financial Conduct Authoritys prosecution of Parvizi and four others, including former Deutsche Bank AG managing director Martyn Dodgson, is the largest and most complicated insider-trading trial ever held in the U.K. The FCA alleges that Dodgson and Andrew “Grant” Harrison, an ex-stockbroker at Panmure Gordon & Co., passed price sensitive information to accountant Andrew Hind, who gave it to Parvizi and day trader Benjamin Anderson.
Parvizi named Paul Murphy and Neil Hume, who worked on the FTs Alphaville service, as well as the Daily Mails markets reporter Geoff Foster as his closest contacts. Asked whether he deliberately spread misleading rumors, Parvizi replied: Definitely, yes, adding I was there to help myself.
Get a Feel
Whichever journalist youre talking to, you get a feel, Parvizi said. If the reporter says theres a suggestion that a private equity company is sniffing around a certain company, you know theres a story coming out tomorrow.
Dressed in an untucked white shirt and jeans, Parvizi explained how he had gone from working in a kebab shop in his early twenties to being one of the biggest names in the stock market, buying racehorses and dividing his time between Los Angeles, Dubai and Spain.
“I was the king of penny stocks,” Parvizi said, adding that his net worth in 2000 was between 50 million pounds and 70 million pounds ($70 million to $98 million).
The FCAs prosecution, which the regulator calls Operation Tabernula, centers on trades between 2006 and 2010 in stocks including Sky Plc and Legal & General Group Plc. The maximum penalty for insider trading in the U.K. is seven years in prison.
Parvizi said he bought and sold millions of pounds of shares daily but never kept any records because he relied on those he traded with to keep notes.
