The 45-year-old was first arrested in 2013 and admitted to buying shares in EnCore Oil and Cairn Energy on the back of information from colleagues before it was made public.
At his sentencing on Wednesday, trial judge HHJ Goymer slammed Lyttleton’s crimes as “blatantly dishonest” and said insider dealing was not a victimless crime.
He sentenced him to 18 months in prison, reduced to 12 months on credit, confiscated £149,861 ($185,300, €178,400) and fined him £82,225.
Inside trade
The charges of insider dealing date back to 2011 when he was given insider information during discussions about EnCore and Cairns while working in the firm’s EMEA fundamental equity team.
He made a £44,000 profit buying 175,000 EnCore shares before news of an imminent acquisition by Premier Oil was made public and selling them shortly after their price jumped, Southwark Crown Court heard.
The former ‘star’ manager dealt through an overseas asset manager based in Panama, called Huduno Invest S.A, which he had set up using his wife’s maiden name.
Incriminating mobile phone messages ordering the trade were found during an investigation by the Financial Conduct Authority (FCA), and two further mobile phones, one registered under a fake name and address, were used to secretly contact his Swiss asset manager.
Abuse of trust
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Lyttleton’s insider dealing involved a gross abuse of the trust placed in him as a senior fund manager. 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.
“Those who are tempted to insider deal, especially financial industry professionals, must know now they are more likely to be caught than ever before and, when caught, they will likely face a custodial sentence.”
After first joining the firm as a graduate trainee in 1992, Lyttleton went on to be the lead manager on BlackRock’s UK Dynamic and UK Absolute Alpha Funds and also held a position in the fundamental equity team.
At its peak, he oversaw the Alpha Fund reach around £2bn in size and became a ‘poster boy’ for Ucits absolute return.
His sentencing signals the latest in a string of 32 successful prosecutions for insider dealing by the FCA.
In a statement, BlackRock reiterated its previous support for enforcement by the FCA against such offences and said there was “no impact to any of BlackRock’s clients as a result” and that Lyttleton’s behaviour was “totally contrary” to the firm’s principles and values.
His sentencing signals the latest in a string of 32 successful prosecutions for insider dealing by the FCA.
