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Ex-BlackRock Manager Gets 1-Year in Insider-Trading Case

Mark Lyttleton was arrested along with his wife Delphine at their west London home in 2013 as part of an investigation, known as Operation Rye, by the U.K. Financial Conduct Authority.

By Suzi Ring

(Bloomberg) -- Former BlackRock Inc. portfolio manager Mark Lyttleton was sentenced to 1 year in prison for insider trading by a London judge, becoming the latest high-profile finance figure to face jail.

The 45-year-old Lyttleton pleaded guilty to two counts of insider trading last month. He made 35,000 pounds ($43,000) trading in two energy companies, lawyers said Wednesday.

Lyttleton was arrested along with his wife Delphine at their west London home in 2013 as part of an investigation, known as Operation Rye, by the U.K. Financial Conduct Authority. His wife was dropped from the probe in 2015. The ex-portfolio manager, who was based in BlackRock’s London office, ran funds including the BlackRock U.K. Dynamic Fund and the BlackRock U.K. Absolute Alpha Fund, once overseeing as much as 2 billion pounds.

"There’s no doubt in my mind that this defendant knew what he was doing," Judge Andrew Goymer said handing down the sentence. But "it remains a mystery" why he did it.

Wearing a dark suit and blue, spotted tie, Lyttleton stared straight ahead as the sentence was read out. He left the courtroom carrying a large, black duffel bag as family and friends comforted each other in the public gallery.

Lyttleton wants to say "very publicly he’s sorry to the court and to all those whom he’s let down," his lawyer, Patrick Gibbs, told the court Wednesday. "He has embarrassed his wife, he has embarrassed his family," employer and colleagues.

EnCore Oil, Cairn

He was charged with three counts of insider dealing in September, later reduced to two at his plea hearing. He was convicted for trading shares of EnCore Oil Plc in October 2011 ahead of news about a proposed takeover and, a month later, Cairn Energy Plc, using information gained from his job at BlackRock. The vacated third count related to trading in electrical company Pursuit Dynamics LLC, according to a copy of the original indictment.

Lyttleton made about 45,000 pounds from the EnCore trading and lost about 10,000 pounds on Cairn. The parties have agreed he’ll pay about 150,000 pounds in confiscation and a further 83,225 pounds in costs.

Lyttleton left the asset manager two months before he was arrested to pursue a career as a life coach, according to his LinkedIn page. Since then he has trained as a Reiki practitioner.

Highs, Lows

"I have experienced many highs (excelling at work) and lows (being arrested) and the understanding I try to share can be beneficial to people in all positions, in all walks of life," Lyttleton says on the social media profile. "Since leaving the financial services industry in 2013, I have been working on my own personal development which has taken me in a number of different directions."

The case marks another success for the FCA in its clampdown on insider trading over the last decade. Prior to 2009 the regulator had never criminally prosecuted anyone for the behavior. In 2016 alone, a former equities trader at Schroders Plc was given two years in prison after pleading guilty to the offense, while a record 4 1/2-year prison term was handed to ex-Deutsche Bank AG corporate broker Martyn Dodgson in May. The FCA has secured 31 convictions in total for the offense.

“Lyttleton’s insider dealing involved a gross abuse of the trust placed in him as a senior fund manager,” Mark Steward, the FCA director of enforcement, said in a statement. “He tried to hide his misconduct through the use of unregistered mobile phones and setting up a company in his wife’s maiden name in an overseas jurisdiction. None of this meant he could avoid detection.”

To contact the reporter on this story: Suzi Ring in London at [email protected] To contact the editors responsible for this story: Anthony Aarons at [email protected] 
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