City analyst who used WFH during the Covid lockdown to make £1million through insider trading is jailed for six years

Daily Mail​

18 hours ago

A high-flying City analyst who made £1million through insider trading while working from home during the Coronavirus lockdown has been jailed for six years.
Albanian Redinel 'Red' Korfuzi, 38, ran the scheme and fed information to his sister Oerta Korfuzi, 36, from the living room of his flat in Marylebone.
The siblings were convicted by a jury of conspiracy to commit insider dealing and money laundering after a three month trial at Southwark Crown Court.
Prosecutors said the pair had worked under 'the cloak afforded by national lockdown restrictions' which allowed Korfuzi to operate the illegitimate racket, between January 2019 and March 2021, without oversight.
Wearing a blue polo shirt and clutching a black leather backpack, Red Korfuzi, a former Janus Henderson research analyst on £500,000 a year, showed no emotion as he was jailed.
His sister Oerta was jailed for five years. Wearing a plaid brown top and jeans she was seen yawning and glancing towards her brother before they were sentenced.
Judge Alexander Milne told the pair said: 'This was greed and arrogance. Everything you have both worked for has now gone. Never again will either of you be trusted to trade again.
'You both thought of yourselves as too clever to be caught out.'
Redinel, came to his job with an undergraduate degree in finance and German, the judge told the court.
'There is no doubt you were successful in your role, and your former boss spoke of you in admiring terms. You impressed him. Your salary was even above £500,000 at one point,' Judge Mine said.
'Those who find themselves in the hands of privileged information are bound by the agreements of an employer. If you did not already know this, you would have been left in no doubt by the training you were given,' the judge continued.
'You had told the jury that compliance checks were of secondary importance. It is clear that you failed to disclose the training done by those living with you in your flat.
'That causal and dismissive attitude was indicative of a more underlying problem.
'You are an intelligent person, with 10 qualifications in professional management from the Chartered Analysts Society. You were inspired to be a day trader.
'But you were an unscrupulous dealer, who wanted an unfair advantage by others in the market. Other brokers and clients lose out because they undertake deals in good faith without insider information.'
'Insider trading diminishes public trust in the integrity of the market.
'The explanation that screenshots of messages were used to advertise skill, is simply beyond belief.
'The offending was detected because it was so blatant and obvious, and that did not deter either of you from denying it in advance.
'As the profits piled up, you both claimed there was at no stage any discussion of the money. The jurors quite clearly determined this to be blatant lies.'
The judge told the pair it 'did not occur' to the siblings that trading on multiple accounts using the same IP address would 'leave a digital footprint'.
Over the space of two years, both the siblings had received large amounts of cash that couldn't be accounted for, the court heard.
The pair had to open a safety deposit box to store £109,210 in the City of London, the judge added.
Tom Forster, for the Financial Conduct Authority, earlier said the Korfuzis took advantage of the 'cloak afforded by national lockdown restrictions' to carry out insider trading, between January 2019 and March 2021.
They netted £963,000 in relation to 11 companies' shares including Daimler, Jet2 and THG and Russian tech firm, Mail.ru.
The prosecutor had asked Jamie Ross, who was working with Korfuzi at Janus Henderson on European equities: 'When the world stops in March 2020 through national lockdown, and people are working from home, how did they do that?'
Mr Ross said company systems could be accessed remotely on personal desktops through a platform called 'Citrus'.
'I used the Citrus platform from my own desktop device at home, and I think that Mr Korfuzi did the same', he said.
Mr Forster asked: 'When you were working from home and using your Citrus, how did you communicate with each other?'
Mr Ross replied: 'This was one of the big challenges, when you are quite literally beside each other (at the office) you discuss investments and potential investments routinely.
'Once you're separated and one person is at his or her home and another person is at his or her home, those discussions migrated to WhatsApp and to phone conversations, and to a certain extent to email or even instant messaging.'
Giving evidence Ms Korfuzi was asked about her trading of Mail.ru shares between September 22 and October 2.
'Mail.ru is a Russian tech company and during September 2020 there was an interest rate increase worldwide.
'Interest rate increase usually affected the price of the value of tech companies, so trading tech (in the) tech sector during September, or last quarter of 2020, was popular.
'It was a good sell', she explained. 'My first search is (on) 22 September.
'I probably searched the stock on my trading account after I searched it on Google, just to see the market value.
'I decided it is a good trading company - probably hearing information from my brother discussing with his work.'
She was asked if she knew anything her brother was doing or talking about in any of the calls was in any way 'forbidden' for her to use.
Ms Korfuzi replied: 'No.'
She said her 'short sale' of shares in Mail.ru happened because of a combination of factors.
'(I) heard my brother, interest rates were up, the tech sector (was) doing good - plenty of reasons.'
Jurors were then directed to messages sent on WhatsApp from Ms Korfuzi to her brother after several of her online trading accounts were shut down.
Jurors heard the translation of one message reads: 'We need to think this through.'
Another said: 'God willing, they have not made any connections.'
Ms Korfuzi explained that these WhatsApp messages were sent because 'cash was up in the air' following the account closures.
She was asked about her decision to trade in 'Dermapharm' shares on 12 October 2022 following her brother being 'wall-crossed' at 12.25pm in relation to the company.
Ms Korfuzi was asked what she was doing while her brother 'Red' was working from home.
'Working in the same space as him, in the living room,' she replied.
She was 'assuming' that a call her brother had with Goldman Sachs lasting 14 minutes and 58 seconds at 14.01 'would be to do with work', the court heard.
Ms Korfuzi was asked if her brother was 'guarded or secretive' talking to bankers and associates over the phone about placings.
'No, no', she answered.
Asked why she made the trades she said pharmaceutical companies were a 'good selling trade' following inaccurate pronouncements President Trump made about vaccine distribution.
Asked what else 'factored into her decision-making', she replied: 'As we saw, my brother has discussed the pharmaceutical sector.
'Given that it was an obvious trade, selling trade, during October I decided I felt it was a good trade to open, to sell shares.'
When the siblings were convicted last month the prosecutor had asked for stringent bail conditions before they were sentenced.
'The SFA's position is that the current bail conditions aren't sufficient to meet the flight risk in this case - both being Albanian, we've heard about money going to Albania.'
He said they had 'pre-existing relationships with criminals' and this was relevant to their conviction of money laundering.
Redinel Korfuzi, of Brunswick House, Marylebone, Oerta Korfuzi, of Abbey Road, St John's Wood both denied and were convicted of conspiracy to commit insider dealing and money laundering.
Almeziad, of Huntingdon House, Battersea, and de Acquini denied and were acquitted of insider dealing and money laundering.
The maximum sentence for insider trading is seven years while it is 14 years for laundering.
The pair were both previously of good character.