On a September night in California aboard the superyacht “Aviva,” one of the U.K.’s richest men sat down for dinner with staff from his sprawling private investment empire.
Joe Lewis, whose family has a controlling interest in Tottenham Hotspur soccer team in London, treated the floating palace as his part-time home and boardroom, often hosting trusted employees, athletes and executives from biotech companies in which he owned a stake.
But U.S. prosecutors and regulators said in filings in New York this week that it was also where the Bahamas-based businessman gathered inside information, eventually passing tips to staff, jet pilots and love interests.
Alleged events on the 321-foot yacht form a key piece of the U.S. Department of Justice and Securities and Exchange Commission’s complaints against the 86-year-old. Lewis faces years in prison on charges that he engaged in a pattern of insider trading over eight years.
His lawyers didn’t respond to a request to comment Thursday. Lewis pleaded not guilty at a hearing Wednesday. One of his attorneys, David M. Zornow, said earlier this week that Lewis had come to the U.S. voluntarily to answer the “ill-conceived charges.”
On that night in September 2019, Lewis, the founder of the Tavistock Group, received a piece of good news over the dining table, according to the SEC complaint.
Mirati Therapeutics Inc., an oncology company where Lewis was one of the largest shareholders, recorded positive results in a clinical trial for a drug that would inhibit cancer-causing mutations of the KRAS gene. A Lewis employee, who was on Mirati’s board, told him the news could send the company’s shares north of $200, according to the SEC’s lawsuit.
But prosecutors say Lewis tipped a host of people to urgently buy Mirati shares – his girlfriend, private jet pilots, a poker buddy in Argentina and another former love interest.
Lewis allegedly “abused his access to corporate boardrooms” to glean sensitive information about companies he or Tavistock had an interest in, Damian Williams, the U.S. Attorney for the Southern District of New York, said this week. Tavistock has stakes in more than 200 companies in 13 countries, including luxury hotels, golf courses and agriculture.
Lewis then passed that information on to friends, employees and love interests, prosecutors allege, making them hundreds of thousands in profits. On one occasion, he loaned his two private jet pilots, Patrick O’Connor, 66, and Bryan Waugh, 64, $500,000 each from a Swiss bank account to buy shares, according to the SEC complaint.
The SEC alleges Lewis, with a net worth of about $6.6 billion according to the Bloomberg Billionaires Index, gave his pilots the lucrative tips as a substitute for providing a formal retirement plan.
Lewis, who built his fortune currency trading in the 90’s, launched the Aviva in 2017, complete with eight guest suites, a helipad and a padel tennis court that Lewis played on daily.
Aviva ranked among the world’s 25-most valuable superyachts shortly after its launch, alongside those owned by Middle Eastern royals, though it’s unlikely Lewis will make money from owning the vessel, which also features a spa, discrete dining areas and a cinema found behind a hidden door.
Carolyn Carter, 33, was Lewis’s girlfriend between 2013 and 2020 and a regular Aviva guest, often when hedge fund employees and executives were on board.
Lewis allegedly provided the funds to set up Carter’s brokerage account in 2016 and regularly shared confidential emails about his fund’s portfolio with her, according to the SEC’s lawsuit.
The SEC is suing Lewis, Carter, O’Connor and Waugh for insider trading. The private pilots also face criminal charges for securities fraud, to which they pleaded not guilty in federal court.
A lawyer for O’Connor declined to comment. Lawyers for Waugh and Carter didn’t respond to requests to comment Thursday. Carter has not been charged criminally in the DOJ case.
Weeks after Lewis heard the confidential information about the Mirati trial in 2019, prosecutors say he allegedly told the pilots to buy as much stock as they could while on a flight from California, where his yacht was docked, to the Bahamas.
Days later O’Connor messaged a friend on WhatsApp passing on the same tip. “Boss said he really likes (Mirati) right now. Think we have people who know. Get it done amigo.”
‘App is Encrypted’
In another text exchange he wrote, “all conversations on app is encrypted so all good.”
On October 28, 2019, Mirati announced favorable results for its KRAS-inhibitor clinical trial, prompting shares to rise 16.7%. Over the next two weeks, Waugh and O’Connor sold Mirati shares, generating net profits of $251,166 and $227,060 respectively, the SEC said.
Lewis is no longer allowed on board his superyacht. He used the boat and his private jet as collateral to secure his release on a $300 million bail package on Wednesday.
Aviva, the title as well for Lewis’s previous superyachts, has traveled in the past month between the Bahamas and Florida, where Lewis has real estate investments and has staged golf tournaments.
Aviva left the Bahamas in the past few days and was traveling early Thursday morning away from the U.S. toward Bermuda, according to marine vessel data.
Lewis was born in London’s East End at a time when the region was the center of the city’s Jewish community.
‘Springlike’
A modern Hebrew name meaning “springlike,” Aviva captivated the U.K. public when the yacht anchored in the tourist-teeming docklands beside London’s Tower Bridge in 2018. While some passersby ogled its gleaming exterior, those familiar with Britain’s 20th century artists may have noticed what appeared to be Francis Bacon’s “Triptych 1974 – 1977” hanging on its lower deck in golden frames.
At dusk, eagle-eyed observers could also spot business news flashing on oversized television screens inside the yacht and Lewis sitting behind the desk of Aviva’s bridge deck office.
Aviva was the world’s 51st largest yacht in 2017 and is now 23 places lower due to a boom in bigger vessels for the ultra-wealthy, according to research from media and data firm Superyacht Group.
“It’s still an amazing vessel,” said Jack Hogan, editor of London-based Superyacht Group. “But it’s now sitting in the middle of the pack overall.”
This article was provided by Bloomberg News.
