Joe Lewis, British Billionaire, Expresses Humiliation and Shame over Brazen Insider Trading Scheme
Inside the U.S. District courthouse off Pearl Street in Manhattan, courtroom 20C was filled to the brim on Thursday. More than 50 people had gathered by 3 p.m. local time to learn the fate of one man: 87-year-old British billionaire, Joe Lewis.
The once-powerful Lewis, now convicted of a “brazen insider-trading scheme” and barred from returning to the U.S., was sat at a table between his attorneys with a black patch over his right eye, and his small frame sinking into his chair. When Lewis first entered the room, he clung to a man who held him steady. That same man had shielded Lewis from photos entering the courthouse, a sharp contrast to the man said to be of “impeccable integrity and prodigious accomplishment” who strode away wearing aviator sunglasses after initially denying the charges against him just 253 days earlier.
In the eight months since, Lewis’ legal team argued his health has sharply declined. Ultimately, this was the deciding factor in the court’s decision to spare Lewis prison time after he passed on confidential information on publicly-traded companies to his romantic partners, employees, and friends. Instead, U.S. District Judge Jessica G.L. Clarke ordered him to three years’ probation and a $5 million (£3.96m) fine. He planned to return to London on Thursday night to have surgery on his right eye as soon as possible, according to his attorney.
“You have before you a frail 87-year-old man with significant health challenges, whose conditions have only deteriorated since the indictment,” Lewis’ attorney, David M. Zornow said.
In explaining her sentencing, Clarke said: “It is clear to me that Mr. Lewis’ life would be at serious risk if he were to be incarcerated.” Lewis also briefly addressed the court. When he struggled to stand, the judge advised him he could address the court while seated.
“Your honor, I am here today because I made a terrible mistake,” Lewis said. “I broke the law. I’m ashamed. I’m sorry and I hold myself accountable.”
Attorneys stressed in court filings that Lewis “has been humiliated in the worldwide media, which has covered this case extensively” because of his ties to Tottenham Hotspur. Lewis founded the company, ENIC, which owns 86.58 per cent of Tottenham and was the club’s owner from 2001 until he ceded “significant control” in October 2022, according to documents filed at the U.K.’s business registry, Companies House. Tottenham declined to comment on Thursday night.
Most of Lewis’ wealth comes from Tavistock Group, an investment organization he owns and founded. According to court filings, Tavistock’s portfolio includes Tottenham; communities and resort properties in Florida, the Bahamas, and Jamaica; restaurant groups; and ownership interests in various private investment funds. He also has homes in several countries, his $250 million yacht, a $90 million aircraft, and an art collection worth $100 million.
The fine will make little impact on a man worth about $6.2 billion, who is considered one of the 500 richest people in the world, although his company Broad Bay Ltd also pleaded guilty in January to participation in securities fraud and will pay $50 million in financial penalties. But Lewis’ tip-offs were never about increasing his own vast personal wealth.
“It is clear that Lewis believed he was above the law, that he had achieved a level of wealth and stature that relieved him from having to operate by the same rules that apply to everyday investors,” wrote Damian Williams, U.S. Attorney for the Southern District of New York, in the court filing. Prosecutors said Lewis did not stand to benefit from the insider trading scheme he orchestrated, and financial gains were only realized by those with whom he shared confidential information. Their earnings “would have been trivial to him,” prosecutors said.
“The defendant did not need to do this. He has billions of dollars,” U.S. Attorney Jason Richman said in court. “He chose to do this.”
The scheme was as elaborate as it was simple. Prosecutors said in court filings that Lewis “engaged in multiple instances of insider trading, over multiple years, on multiple continents, with multiple people.” Prosecutors began outlining his missteps in 2019.
Lewis owns about 80 percent of the investment fund Boxer Capital, which makes investments in publicly-traded life science companies, and the billionaire insisted he received updates on investments made by the company and updates on clinical trials by certain companies he invested in. This is where the insider trading scheme started to brew.
In early 2019, when a monsoon caused significant flooding in Queensland, Australia, the Australian Agricultural Company was impacted, which Lewis had a majority stake in. Lewis later learned the damage would have a negative impact on the company’s stock, so he provided this confidential information to his personal pilots who also had invested in the company because they stood to lose money.
This type of exchange happened several times, with different companies and at the benefit of different people, according to prosecutors.
It happened again in 2019 with Solid Biosciences, a biotechnology company. Through Boxer, Lewis was a significant shareholder in the company and learned of a pending agreement with an investment bank, as well as a planned clinical trial. While visiting South Korea with his then-girlfriend, Lewis tipped her off to purchase stock. She then used all her funds to buy $700,000 worth of stock in the business. The following day, when flying on Lewis’ private plane, he recommended his pilots do the same.
These tips found their way to several of Lewis’ personal assistants and at least three other friends, including one he was romantically involved with and another he played poker with in Argentina, prosecutors said. In one instance, Lewis even loaned his pilots $500,000 each to use for insider trading, which they later returned to him.
“He was the single source of the misappropriated inside information, and he was the sole tipper at the heart of this vast network,” prosecutors said in court filings. “Put another way: without Lewis, no one else would have traded on insider information.”
Despite the gravity of Lewis’s insider trading, prosecutors said they, like the court, struggled with determining an appropriate sentence for an 87-year-old in failing health. In addressing the judge, Richman said the government “was not seeking, specifically, incarceration.”
Six doctors submitted letters to the judge in pre-sentencing submissions regarding Lewis’ health. Their messages were redacted from the public record for privacy, but attorneys for Lewis did say the businessman “is experiencing very significant problems with his right eye and needs surgery.” That surgery would happen with his doctor in London, Zornow stressed, which is why “Mr. Lewis is anxious to depart the U.S.”
Lewis also received leniency because he was cooperative with investigators from the beginning, the court said, and because he voluntarily surrendered in the United States upon being indicted, rather than go through extradition in the U.K., a process that could have taken years.
When Lewis learned of his indictment, he immediately traveled to New York to face the charges, his attorneys said. He was then released on a $300 million bail, secured against his 98-meter superyacht and private aircraft and remained in Florida.
Now that Lewis is on probation, his aircraft will be returned so he can self-deport. His attorneys said he planned to leave the U.S. by Thursday night. His yacht, the Aviva, remains held until fines are paid.
Given Lewis’ wealth, paying a fine is a low concern, with attorneys saying the billionaire had funds on standby with a lawyer in the Bahamas to ensure his dues with the court are paid as quickly as possible.
Though Lewis will not be returning to Clarke’s courtroom, this is where his pilots will be in the coming months to face the consequences of this vast, alleged scheme.
When Lewis exited the courthouse on 500 Pearl Street, he again did so while being shielded from cameras and even questions. He quietly entered a black car and slipped away, out of Manhattan and out of the U.S.