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A former communications adviser was sentenced to three years and three months in jail by Frankfurt district court on Friday after he was found guilty of insider trading spanning multiple years.
The 48-year-old, who cannot be named for legal reasons, was found guilty by a panel of five judges of making more than €14mn in profit between 2017 and 2021 from trading on inside information shared by a partner of Perella Weinberg Partners, a prestigious boutique investment bank.
He was also ordered to repay the gross proceeds of its illicit share sales of €24mn to the state.
The communications adviser admitted buying shares and options after receiving tips about stocks that “should be looked at”, “could become interesting” or “may turn into a takeover target”.
The PWP banker, an old friend, did not share specific information such as the identity of a prospective bidder, offer prices or timelines, the communications adviser said.
The transactions involved included Fortum’s acquisition of a majority stake in Uniper in 2017, the 2018 asset swap between RWE and Eon, the 2019 bidding war over Osram and the takeover of Deutsche Wohnen by Vonovia in 2021. PWP was advising on all the transactions.
Both friends regularly met in Frankfurt or Munich for morning meetings where they chatted about job-related concerns and exchanged views about the stock market. They jokingly called their meetings “the breakfast trust”.
The communications adviser was arrested in January 2023 and has been in police custody ever since. His friend died by suicide after his office and his house in London were raided by police that month.
The communications adviser also oversaw up to €1mn in cash on behalf of the investment banker, which he invested alongside his own funds.
Frankfurt prosecutors had called for a sentence of 7 years and 3 months, which would have been by far the longest jail term for any insider trading case in Germany. The longest insider trading sentence handed down by a German court is three years and eight months, in 2022.
In his closing statement to the court, the defendant expressed full remorse for his conduct, but said that at the time he was not aware it was illegal to trade on the tips.
His lawyer had urged the court to sentence his defendant to not more than three years in jail, pointing to his client’s early and extensive confession in court, which helped to shorten the trial.
He also argued that the three largest trades were not based on insider information but on vague tips that the Perella banker had shared.
Explaining the verdict, the presiding judge Annette Zander said that the defendant and the late banker had been a “good team” which functioned based on mutual trust and required little need for co-ordination.
“Even without knowing any details [about the corporate deal making], he was aware of the tips’ significance and that he was supposed to trade accordingly,” said Zander.
