In a prosecution brought by the UK regulator, the Financial Services Authority, three people have pleaded guilty to insider dealing. James Sanders, a director of Blue Index, a specialist contract for difference brokerage, had previously pleaded guilty to a total of 10 charges of insider dealing, his wife Miranda Sanders to five charges of insider dealing and James Swallow, a co-director of Blue Index, to three charges of insider dealing at an earlier hearing. They will be sentenced on 19 June 2012.

The news of the guilty pleas came as Christopher Hossain, a former senior trader at Blue Index and Adam Buck, a former employee of Blue Index, were acquitted.

Arnold McClellan, then a partner at Deloitte in the US, was “insider” to a number of mergers and acquisitions in US securities listed on the NYSE and NASDAQ exchanges. The prosecution case was that inside information was passed to James and Miranda Sanders who used the information to commit insider dealing in those US securities between October 2006 and February 2008.

James Sanders also disclosed information to others including Swallow, who used that information to commit insider dealing. In addition, James Sanders encouraged clients of Blue Index to trade in CFDs on the basis of that inside information. The total profits generated by the defendants were approximately £1.9 million (about $3.0 million), while the total profits generated by the clients of Blue Index were approximately £10.2 million.

The case involved a parallel investigation by the US Securities and Exchange Commission and US Department of Justice, together with the Federal Bureau of Investigation. As a result of action taken by the SEC, Annabel McClellan reached a settlement which included the payment of a $1 million fine. She also pleaded guilty to a charge brought by the DoJ and is currently serving an 11-month prison sentence.