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A former communications consultant was sentenced to three years and three months in prison by the Frankfurt Regional Court on Friday after being found guilty of insider trading over several years.
The 48-year-old, who cannot be named for legal reasons, was found guilty by a five-judge panel of making a profit of more than 14 million euros between 2017 and 2021 by trading on insider information from a partner at Perella Weinberg Partners . a renowned boutique investment bank.
He was also ordered to pay back to the state the gross proceeds from the illegal share sales amounting to 24 million euros.
The communications consultant admitted to buying stocks and options after receiving tips about stocks “to watch,” “that could become interesting” or “that could become a takeover target.”
The PWP banker, an old friend, did not share specific information such as the identity of a potential bidder, bid prices or timelines, the communications consultant said.
The transactions included Fortum’s acquisition of a majority stake in Uniper in 2017, the asset swap between RWE and Eon in 2018, the bidding war for Osram in 2019 and Vonovia’s acquisition of Deutsche Wohnen in 2021. PWP was present in all transactions active in an advisory capacity.
Both friends met regularly in Frankfurt or Munich for morning meetings where they discussed professional matters and discussed the stock market. They jokingly called their meetings “The Breakfast Trust.”
The communications consultant was arrested in January 2023 and has been in police custody since then. His friend died by suicide after his office and home in London were raided by police this month.
In addition, the communications consultant managed up to 1 million euros in cash on behalf of the investment banker, which he invested alongside his own funds.
The Frankfurt public prosecutor’s office had demanded a sentence of seven years and three months, which would have been by far the longest prison sentence in an insider trading case in Germany. The longest insider trading sentence imposed by a German court is three years and eight months in 2022.
In his final statement to the court, the defendant expressed full regret for his behavior, but said that at the time he was not aware that it was illegal to trade the tips.
His lawyer had urged the court to sentence his defendant to no more than three years in prison, citing his client’s early and detailed confession in court, which helped shorten the trial.
He also argued that the three biggest deals were based not on insider information but on vague tips passed along by the Perella banker.