Mathew Webb, of Tiki Island (near Galveston) has pleaded guilty for his role in an insider trading and kickback scheme. Back in February, I wrote about energy trader John Ed James who pleaded guilty for his role in the same scheme.
Webb paid kickbacks to James and co-conspirator Marcus Schultz (who pleaded guilty in July 2020) using commission fees paid by Schultz’s employer, Shell.
Instead of trading futures contracts openly and competitively, Schultz disclosed to James and Webb material non-public information that he would be willing to accept on behalf of Shell. Webb would arrange offsetting trades with James and another unnamed co-conspirator. The group would net the difference between the price of these trades and the price that would have been obtained in arms-length transactions. Illicit gains totaling $966,403 were split among the group. Webb received $585,000.
The scheme ran from 2013 to 2016.
In June 2019, the National Futures Association suspended Webb through January 2022 and fined his company $200,000. They found that Webb “failed to uphold high standards of commercial honor and just and equitable principles of trade.”
The hearing panel also found that the company failed to maintain adequate and complete records. The panel had heard evidence that three years’ worth of telephone recordings were missing due to a malfunction. Mary Webb, the wife of Mathew, was the Associated Person for the business (someone who is meant to ensure the business follows the rules of the regulatory bodies).
Webb is scheduled to be sentenced in September. Schultz and James also awaiting sentencing.