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Prison sentence not appropriate for hedge fund manager Phillips, say lawyers

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Neil Phillips, the co-founder of hedge fund Glen Point Capital who was convicted of manipulating the US dollar-rand exchange rate to trigger a payout on a $20m option, should not be sent to prison, according to his lawyers.

A report by Bloomberg reveals that Phillips’s legal team made the argument in a sentencing court filing on Monday after he was found guilty on a single count of commodities fraud by a jury in October, following a week-long trial.

According to Phillips’s lawyers, the 54-year-old’s “career was destroyed by a single trade”, and he has been punished enough having already served a month in prison and seen his hedge fund wound down. In addition, his conviction will “prevent him from being licensed in the securities or commodities industries ever again (absent a successful appeal)”, they wrote.

Prosecutors are expected to file their own recommendations next week, ahead of sentencing on 3 June. The maximum sentence for commodities fraud is 10 years.

The trade in question was placed by Phillips from South Africa and executed by a Nomura banker in Singapore, which resulted in the payout on an option sold by a London broker.

Phillips, a native of South Africa who lives in London, is expected to appeal his conviction to the 2nd US Circuit Court of Appeals, which has overturned jury verdicts involving overseas financial misconduct.

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