Cazenove, the Queen’s stockbroker, was embroiled in a criminal insider dealing scandal yesterday after it was alleged that a former partner made almost £300,000 trading on confidential leaks from within the 187-year-old company. Malcolm Calvert, a Cazenove marketmaker until he retired in 2000, is being prosecuted for 12 counts of criminal insider dealing for buying shares ahead of six takeover deals in which Cazenove advised. Opening the trial yesterday, Peter Carter, QC, for the Financial Services Authority (FSA), said that Mr Calvert used a “connection within Cazenove” to buy nearly half a million shares in six companies just before they were taken over. Cazenove was “the common denominator on all six deals”, Mr Carter told the jury at Southwark Crown Court and “will play an important part in this case”. Mr Carter regretted that the FSA had not been able to identify the source of the Cazenove leak. Related Links Sale to JP Morgan marks end of Cazenove era Cazenove’s American gamble pays off Mr Carter told the jury of six men and six women that although they would hear about “high finance” during the three-week trial, this was “a case about simple dishonesty”. “Dishonesty in acquiring information that you ought not to have and using that information to trade on shares and make a profit,” Mr Carter said. Mr Calvert, 65, is alleged to have acted on tips from his Cazenove source to buy about 420,000 shares ahead of crucial stock exchange announcements by HP Bulmer, Macdonald Hotels, Vernalis, Johnston Group, South Staffordshire and RAC between 2003 and 2005. As a former partner at the venerable stockbroker, Mr Calvert was “a bit too close to the action” to deal in shares himself, the court heard, and so he enlisted a friend with no City connections to do the actual buying and selling of shares. Mr Calvert told Bertie Hatcher, a friend he knew from betting on horses, that he had a “good source” of share tips but was prohibited from trading because of his Cazenove links. Mr Carter told the jury that this was untrue. He said Mr Calvert traded regularly on his own brokerage account and that he enlisted Mr Hatcher to distance their insider trading from his Cazenove source. The court heard that the trading profit of £280,000 was split with Mr Hatcher keeping one third and two thirds going to Mr Calvert. The court heard that Mr Hatcher had avoided criminal prosecution by doing a deal with the FSA in which he agreed to be a prosecution witness and reveal his dealings with Mr Calvert. Mr Carter said that Mr Hatcher, who would have been the prosecution’s first witness, had since developed dementia and would no longer be able to testify in person. His witness statement, written before the illness set in, would be read to the court instead. The jury heard that when Mr Calvert first pitched his idea to Mr Hatcher, a friend of 20 years, he said: “You buy these shares and when you sell and make a profit we’ll split it.” Mr Carter said: “This isn’t a man giving a friend tips in the pub. This is a man who’s intimately connected with the details of that transaction ... buying shares through someone else.” Mr Carter told the jury that Mr Hatcher, on Mr Calvert’s instructions, bought and sold shares through Hargreaves Landsdowne, the retail broker. He said the jury would be played tapes of two telephone share deals where Mr Hatcher was placed on hold and, perhaps not realising the call was still being recorded, can be heard to address someone as “Malcolm”. Mr Calvert, 65, of Fairmile Lane, Cobham, Surrey, denies 12 counts of insider dealing. He is on bail for the duration of the three-week trial. Yesterday, wearing a dark grey suit with a cream handkerchief in his top pocket and a blue tie with pictures of horses, Mr Calvert sat next to his solicitor on the bench at the back of the court, rather than in the dock. Cazenove said: “This case is against an individual who left Cazenove in 2000 and is in connection with matters after that date. There are no charges against Cazenove. The matter is subject to a court proceeding and we are therefore unable to comment.”