An accused insider-trader had no idea a hedge fund trader friend was passing him confidential information, he told British regulators.
In a statement to the Financial Services Authority, Rupinder Sidhu said he thought tips given him by former AKO Capital trader Anjam Ahmad were based on "research, knowledge and expertise." And they were, in a sense: Ahmad was instructing Sidhu to front-run AKO's trades, allowing the two men to make hundreds of thousands of pounds on spread bets.
But Sidhu, who will be cross-examined today, said he had no idea that Ahmad was doing anything wrong.
"I was shocked to discover what Ahmad had been doing at his work," Sidhu wrote. "I have not knowingly been involved in any insider-dealing activity."
According to Sidhu, Ahmad told him that he wasn't able to trade the stocks himself due to his employment agreement with AKO. Instead, he suggested covertly passing the tips to Sidhu in exchange for 40% of the proceeds, Sidhu wrote.
Sidhu faces 24 counts of insider trading and money laundering. He has pleaded not guilty. Ahmad pleaded guilty to insider-trading charges in May.