A former hedge fund trader pleaded guilty to insider dealing yesterday in a landmark deal under which he may testify against his suspected co-conspirators, if they are charged, in the hope of receiving a lighter sentence.

Anjam Ahmad, 39, who worked at AKO Capital, is the first person to strike a plea deal with the Financial Services Authority in a case of this kind. He has admitted one count of conspiracy to commit insider dealing, relating to transactions in the shares of 22 companies.

Ahmad, who previously worked at Citigroup, has agreed to become a co-operating defendant and will assist the FSA with its investigation and any subsequent prosecutions. He was arrested in January along with two other men whom the FSA is still investigating.

Ahmad and the regulator declined to comment.

Judge Geoffrey Rivlin, QC, told Ahmad, who will be sentenced on June 22: “I can make no promises as to sentence. I hardly need tell you that this is a serious matter.”

Insider dealing carries a maximum sentence of seven years’ imprisonment, although Ahmad is likely to be given a substantial discount for co-operating and pleading guilty at an early stage.

In a Serious Fraud Office case this month, the Court of Appeal reminded defendants that co-operation does not carry an automatic right to avoid jail.

The FSA received the power to strike plea agreements only in April. Ahmad is the first insider dealing defendant to take advantage of this.

Neill Blundell, a partner at the law firm Eversheds, said that the City regulator would be delighted at securing a conviction without the need for a trial.

The FSA has won five convictions for insider dealing in the past 18 months. All five defendants pleaded not guilty and were convicted after a jury trial. All received jail terms, although in one case this was suspended on the grounds of age and ill-health.

http://business.timesonline.co.uk/tol/business/law/article7129697.ece