Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Blue Index Owners Guilty of Inside Trades, Other Cleared

The co-owners of the now-defunct spread-betting firm Blue Index Ltd. and one of their wives pleaded guilty to U.K. insider-trading charges before the case went to trial.

A former senior trader at the brokerage, Christopher Hossain, and a friend of the founder, Adam Buck, were cleared of similar charges today, after a five-week trial at a London criminal court. The U.K. Financial Services Authority had alleged at the trial that the two men made at least 185,000 pounds ($290,000) combined trading on tips they received from the fund’s founder James Sanders.

Sanders, who pleaded guilty to 10 charges, traded on tips that Kronos Inc., aQuantive Inc. and Getty Images Inc. were the targets of takeover offers, according to the FSA. Sanders’ wife, Miranda, pleaded guilty to five counts of insider trading, and Blue Index co-owner James Swallow to three charges before trial, according to the FSA.

Profits generated by the defendants from the inside information were about 1.9 million pounds, while Blue Index clients reaped approximately 10.2 million pounds, the FSA said in the statement. The three who pleaded guilty will be sentenced on June 19. The information originated from Arnold McClellan, the head of the mergers and acquisitions advisory group at the accounting and consulting firm Deloitte LLP’s San Francisco office. McClellan’s wife, Annabel, is Miranda Sanders’s sister.

‘Criminal Conduct’

Sanders and Swallow abused their position at Blue Index “for their criminal conduct and cynically exploited the inside information they had illegally obtained to try and improve its reputation and profitability,” said Tracey McDermott, acting director of the FSA’s enforcement and financial crime division.

James Sanders and his wife made 1.5 million pounds from trading on the tips, according to the FSA, which wasn’t allowed to comment on the case until today for legal reasons.

Lawyers for Buck, the Sanders and Swallow didn’t immediately respond to requests for comment.

Blue Index, a spread-betting firm that traded contracts-for-differences, collapsed after the FSA raided its office in May 2009. A contract-for-difference is a financial instrument that allows investors to bet on shares or other securities without owning them.

Hossain, the senior trader, was charged with trading based on inside information about Kronos and advising Blue Index clients to trade Kronos and aQuantive, according to the indictment. Buck, who was the best man at Sanders’s wedding and once worked at Blue Index, was accused of trading Getty Images based on inside information, producing a 140,000-pound profit.

‘Flawed’ Case

Hossain said in a statement he regretted that the FSA brought a “fundamentally flawed” case against him.

“The reputational damage that this case has caused is incalculable and the financial costs have been huge,” Hossain said.

Annabel McClellan, who lives in San Francisco, was sentenced in the U.S. last year to 11 months in prison for obstructing a Securities and Exchange Commission investigation. She also settled with the SEC for $1 million in a lawsuit alleging she and her husband tipped off the Sanders to merger deals.

McClellan told prosecutors that her husband wasn’t aware of, or involved in, passing information, according to documents filed in the SEC case. The case against her husband was dropped.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.