Jail for insider trading at now-Moto unit

Britain's financial regulator sent its first person to prison for illegal insider trading after the former general counsel of TTP Communications Plc, now a Motorola Inc. unit, was sentenced to eight months.

Christopher McQuoid, 40, received the sentence today on a single insider-trading count brought by the Financial Services Authority. He was found guilty by a London jury on March 27. His 75-year-old father-in-law, James Melbourne, received an eight- month suspended sentence.

It's the FSA's first criminal insider-trading prosecution. The men were convicted last week on charges they bought TTP shares before the company announced it would be bought by Motorola in 2006 and later split about 50,000 pounds ($71,000) in profit after they sold the stock.

Theyengaged in "deliberate and calculating behavior," said Judge Peter Testar before he sentenced McQuoid and Melbourne. Insider trading "is not a victimless crime."

The regulator has been under pressure by lawmakers to send more people to prison for insider trading, which carries a maximum sentence of seven years. Before the case against McQuoid and Melbourne, the FSA had never filed any criminal proceedings for the crime. The agency has promised to bring more criminal cases against senior managers as part of a new philosophy of "credible deterrence."

Testar agreed with Annette Henry, Melbourne's attorney, that because of his age and the ill health of his wife and son, Melbourne shouldn't be sent to jail and instead have a so-called residency requirement imposed on him during his suspended sentence.

The trade "was a single lapse in an otherwise exemplary career," said Jonathan Caplan, McQuoid's attorney. His legal team told Bloomberg News on March 27 that they would consider appealing his conviction.

No one was immediately available to comment at the FSA.