Milsom, 45, was sentenced on Thursday after pleading guilty earlier this year to one count of passing inside information to external brokers, in an arrangement which made him £245,000.
On several occasions between October 2008 and March 2010, he tipped off Graeme Shelley, a former Novum Securities broker, and another unnamed trader, shortly before Legal & General executed its own block trades, in order to benefit from any subsequent movement in the market.
The court heard that Milsom and Mr Shelley used unregistered pay-as-you-go handsets to communicate, swapping the SIM cards five times to avoid detection, and that after the trades the pair would meet to split cash payments. Milsom split the profits, which totalled £400,000, roughly in half with Mr Shelley and the second trader.
Milsom’s conviction is the first to come out of the FSA’s biggest ever insider-trading investigation, Operation Tabernula, which saw the regulator arrest seven people and raid 16 address in London and the South East in March 2010.
Judge Jeffrey Pegden, who presided over the case at Southwark Crown Court, told Milsom today that his actions were “deliberate, planned and dishonest and you took certain measures to hide your criminal conduct.” However he did commend Milsom, who will have to serve around half his sentence, for pleading guilty at the earliest opportunity.
“This case involved serious offending over a number of years, conducted in a sophisticated way using deliberate techniques to avoid detection,” said Tracey McDermott, director of enforcement at the FSA.
“Milsom was an approved person who was entrusted by his employer with sensitive and valuable information. He betrayed that trust by exploiting the information for his own benefit.”
The regulator charged five other individuals last year in the case, which it has called its “largest and most complex insider dealing investigation to date.” They have not entered pleas.