A businessman who parted with £620,000 after entering into an illegal insider trading contract during a kitchen table poker game has been awarded his money back by the Court of Appeal in a case which broke new legal ground.
In what was described as a ‘murky story’, the businessman had paid the money to an acquaintance who claimed to have the inside track on management decisions taken within a high street bank. The objective was to make large sums of money by well-informed spread betting on movements in the bank’s share price.
The venture in the event came to nothing because the expected inside information was not forthcoming and the businessman sued for return of his shady investment. However, his claim was dismissed by a judge on the basis that, on his own case, he had entered into an illegal contract and the law would therefore not assist him.
In upholding the businessman’s challenge to that decision, and directing repayment of his investment, the Court noted that the illegal agreement had ‘not been carried out to any extent’. The businessman had withdrawn from the contract when he realised that it was not capable of being performed and whether that withdrawal was a sign of ‘genuine repentance’ on his part was not relevant to the outcome of the case.