Subtle but media-shy British billionaire and Tottenham Hotspur owner Joe Lewis, with an estimated net worth of $6.2 billion (£4.4 billion), has rarely been in the limelight. However, he is now making headlines worldwide due to his controversial conduct.
Lewis, once regarded as one of the fiercest forex traders globally, joined George Soros's speculative team during the 1992 Pound Sterling crisis, targeting the British currency and amassing enormous wealth. In recent years, his name has been used fraudulently to set up the 'Joe Lewis Trading' website and scam investors out of their money, culminating in an international 'True and False Lewis' scandal.
This time, however, it is the 86-year-old Lewis himself who has landed in hot water. CCTV Finance reported on July 29 that Lewis was indicted by U.S. prosecutors this week on insider trading charges, alleging he shared confidential information from his investment company with a personal assistant, girlfriend, and pilots, allowing them to profit. A spokesman for the U.S. Attorney's Office stated that Lewis surrendered to federal authorities in Manhattan Wednesday morning.
U.S. prosecutors claim that in 2019, Lewis offered his pilots a $500,000 loan and encouraged them to buy stocks from a tumor company before favorable clinical trial results were released. Consequently, the stock rose 16.7% in a day, allowing the two pilots to repay Lewis's loan. Lewis held board seats at several companies and authorized employees to serve on the boards, enabling him to access insider information.
According to Forbes's real-time billionaire list, Lewis currently ranks 441st globally with an estimated net worth of $6.2 billion (approximately 44.3 billion yuan).
Accused of Sharing Insider Information, Korean Girlfriend Doubled $700k Investment
Lewis is the founder and major investor of Tavistock, a globally renowned private investment company, which invests in more than 200 companies in 15 countries worldwide. Its investment fields include real estate, sports events, and notably the English Premier League club Tottenham Hotspur.
On Tuesday, July 25, U.S. prosecutors alleged that Lewis was involved in several cases of suspected insider trading. The U.S. prosecutors have levied 19 charges against the 86-year-old Lewis, including securities fraud, conspiracy to commit securities fraud, and false statements.
In addition to profiting from insider information he obtained, Lewis was accused of sharing this information with his staff, friends, and girlfriends over the long term, even lending money to employees to speculate on the stocks he recommended.
Prosecutors stated that as an incredibly wealthy individual, Lewis's actions were utterly unnecessary. They assert he used insider information to compensate employees or give gifts to friends and lovers, equating to cheating and illegal activities.
According to the prosecution, Lewis garnered information from a series of companies in which he invested over eight years, divulging it to his inner circle before it was publicly announced. The companies involved, according to U.S. allegations, include listed companies Solid Biosciences, Mirati Therapeutics, beef producer Australian Agricultural Company (AAC), and an acquisition business company known as BCTG.
For example, in 2019, when the AAC company's board informed Lewis that the company would suffer financial losses due to Queensland's floods that insurance couldn't fully cover, Lewis immediately informed his private pilots, urging them to sell the stock quickly before the information was disclosed.
The pilots couldn't execute the trade in time, but one allegedly sent an email to the stock broker, expressing hope that "the boss could give us some hints earlier."
Lewis also loaned the two pilots $500,000 each to buy shares in a pharmaceutical company he recommended. As a shareholder in this company, he knew that the company would soon announce favorable clinical trial results. One of the pilots emphasized to friends considering buying the stock that his boss had inside information and advised them to purchase quickly.
Prosecutors disclosed that Lewis also shared this information with a girlfriend, a personal assistant on his $250 million superyacht where he sometimes resides, a poker buddy, and a friend with whom he'd had an ambiguous relationship. These people all profited from the insider trading.
Moreover, Lewis informed his Korean girlfriend to invest in biotech company Solid Biosciences because he knew the company was about to announce clinical trial results and new investment news. His Korean girlfriend put all her available $700,000 into the stock and eventually profited over $800,000 (approximately 5.72 million yuan).
Additionally, Lewis told his two personal assistants on his private yacht to buy shares of the special purpose acquisition company BCTG, stating that the stock could "double, triple, or even quadruple." BCTG merged with biotech company Tango Therapeutics in 2021, nearly doubling at its highest point after the deal was announced.
In response to these allegations, Lewis's attorney, David Zornow of Skadden, Arps, Slate, Meagher & Flom, stated that the U.S. government had made a serious misjudgment in prosecuting Mr. Lewis. Zornow described Lewis as a person of impeccable character and remarkable achievements, who voluntarily came to the U.S. to face these inappropriate charges. "We will vigorously defend him in court."
Low-Key Top Forex Trader, He Once Targeted the Pound with Soros
According to Yicai, Lewis was born in East London and dropped out of school at 15 to join the family catering business. His claim to fame was the Black Wednesday during the 1992 Pound Sterling crisis.
As previously mentioned, he joined Soros's short-selling team during the crisis. While Soros made £1 billion in profits from the Pound's dramatic fall on Black Wednesday, Lewis never confirmed his exact profit amount. Market rumors suggest that Lewis earned more than Soros from this trade, subsequently elevating Lewis to the global top forex trader ranking, where he is referred to as the "currency speculator."
The only publicly acknowledged substantial profit Lewis made was from shorting the peso during the 1992 Mexican financial crisis, which exponentially increased his wealth.
However, Lewis also experienced investment losses. He once invested in Wall Street bank Bear Stearns and reportedly lost nearly $1 billion during the 2008 financial crisis when the bank collapsed.
Lewis is known for his low-key lifestyle and seldom makes public appearances. He lives most of the year on his superyacht, the Aviva, which he considers a mobile office. Despite his wealth, Lewis reportedly leads a simple life and loves playing golf and art collection.
Over the years, Lewis has built a massive art collection that is said to be one of the most extensive private collections in the world. It includes works from masters such as Pablo Picasso, Henri Matisse, Lucian Freud, and Francis Bacon. He also owns the professional golf tournament Tavistock Cup and the Lake Nona Golf & Country Club in Orlando, Florida.
Although Lewis is not directly involved in the day-to-day operations of Tottenham Hotspur, he has a significant influence on the club. The Spurs have been performing well in the Premier League in recent years and are considered one of the most profitable football clubs in the world.
The insider trading allegations against Lewis have sent shockwaves through the global financial community and the world of football. The charges could have serious implications for his business empire, which spans several sectors and continents.
Legal experts suggest that if convicted, Lewis could face hefty fines and potentially jail time. Moreover, his reputation in the business community could be severely damaged. The case could also affect his investments, including Tottenham Hotspur, whose value could be impacted by the scandal.
The Securities and Exchange Commission (SEC) has tightened its regulations on insider trading in recent years. High-profile cases like this one serve as a stern reminder of the serious consequences that can result from insider trading.
