The Insider-Trading Case Against Joe Lewis
Wall Streeters are still buzzing and scratching their heads over the indictment of British billionaire Joe Lewis late last month in the Southern District of New York on insider-trading charges; he pleaded not guilty.
Lewis, 86, came on the big stage in the early 1990s, when he made a fortune shorting the pound—the same trade that famously enriched George Soros. Lewis continued to coin money and has controlled English Premier League team Tottenham Hotspur and developed Florida golf communities Isleworth and Lake Nona.
His most eye-catching holding, though—where Lewis liked to hang offshore in his 321-foot superyacht Aviva—is the Bahamas’ Albany Resort, which he owns with Tiger Woods and Justin Timberlake, among others.
That resort was where Sam Bankman-Fried holed up before his arrest, in an apartment near a unit owned by Dan Snyder, the controversial former owner of the Washington Commanders. At Albany, you might bump into Jimmy Fallon at the pool, or baseball player Justin Verlander and his supermodel wife, Kate Upton, at lunch, or pass by the mansion being built by Denise Rich, ex-wife of indicted and pardoned financier Marc Rich, who died in 2013.
Lewis’ alleged insider-trading scheme appears to be as brazen as it was idiotic. The indictment maintains that Lewis tipped off his two pilots and then-girlfriend, a 33-year-old former Miss U.S. Virgin Islands, to nonpublic events in companies, including biotechs Solid Biosciences and Mirati Therapeutics , in which Lewis indirectly held stakes. In one instance, he allegedly lent money to the pilots to make the trades.
Lewis’ lawyer didn’t return phone calls about the case, but did make a statement accusing the government of “an egregious error in judgment."
The whole affair is curious for a number of reasons. To wit: Why would a billionaire, who was said to be a generous sort, engage in this risky form of gift giving? (Lewis isn’t accused of trading himself.) Also, what precipitated the investigation? In other words, who or what tipped off the feds to trades in six figures?
Some on Wall Street have speculated that Lewis’ indictment was somehow connected to Sam Bankman-Fried, who faces multiple charges after the collapse of his crypto exchange FTX. After all, both cases have Albany in common; both are being prosecuted by Damian Williams, the U.S. attorney for the Southern District; and the court hit both with megabond amounts for release, $250 million for SBF, $300 million for Lewis. Is this a coincidence? Or did SBF or one of his associates flip on Lewis?
Calls to the U.S. attorney’s office were not returned. But after some digging, it appears that a connection between the cases is unlikely.
People familiar with the investigation tell me the government first contacted Lewis’ pilots in May of 2021, at which point SBF was still a golden child to most of the world—a good 18 months before his house of cards collapsed last fall.
It’s tough to prove a negative. During an initial conference in federal court in Manhattan on Aug. 8, Assistant U.S. Attorney Jason Richman told the court that “discovery is an extremely large volume of material….We think there will be over 20 terabytes of data in total, millions of pages of documents. The material includes five electronic devices, 14 email accounts, 11 iCloud accounts…”
As such, the court allowed that Richman et al. would have until November to complete discovery—unless they needed more time after that. As for a trial, that might not happen until early 2025—when Lewis would be pushing 90. Sure, Lewis could cop a plea. But the government might also insist on sending the soon-to-be-nonagenarian to the pokey, if he’s convicted.
None of this should be surprising. As the young son of a Wall Street notable said to me on a trip there, “The Bahamas is a sunny place for shady people.” I was struck by the lad’s astute adaptation of the Somerset Maugham assertion—used originally to describe Monaco, another oasis of yachts, celebrities, and dreams of riches.