A round up of some of the week’s most significant corporate events and news stories. Insider traders sentenced in wake of Tabernula probe A former corporate broker at Lehman Brothers and Deutsche Bank who once advised the government on its bailed-out banks landed a record four-and-a-half year sentence for insider trading this week, the culmination of a 12-week trial and an eight-year £14m investigation by the UK’s markets watchdog, writes Caroline Binham. Martyn Dodgson (left) and Andrew Hind Martyn Dodgson was found guilty earlier this week of a single count of conspiracy to insider trade with his close friend, Andrew Hind, an “odd” technophile geek and a former finance director at Topshop. Hind received a three-and-a-half-year sentence. Dodgson, who earned £600,000 at Deutsche in 2009, was found guilty of passing information he gleaned from his work to Hind, who would then place trades through two “prolific” day traders, Iraj Parvizi and Ben Anderson. Those two traders, along with Dodgson’s friend Andrew “Grant” Harrison, were acquitted by the jury at London’s Southwark Crown Court. Hind kept meticulous records of the profits of the scam, labelling Dodgson “Fruit”. For his part, Hind was known as “Nob” by the traders. The nicknames were just one feature of a conspiracy that included military-grade encryption devices, Panamanian bank accounts, cash payments and pay-as-you-go mobile phones. The case, known as Tabernula — Latin for “little tavern” — was the Financial Conduct Authority’s most complex and high-profile, made public with dawn raids across the City in 2010. It was the first time the FCA used covert recordings and surveillance in an insider-trading case. Tabernula has already netted three guilty pleas from a former hedge fund trader, an ex-equities trader, and a former broker. ● Related Lombard note: Last Chance Tavern Clothing stores suffer weak results on strong dollar It was a bleak winter for American retailers and spring did not bring any sun. Clouds are also hanging over the rest of the year, writes Lindsay Whipp. ©Getty A string of disappointing first-quarter earnings at companies from Gap to Nordstrom underscored the struggle facing the US’s best-known names in selling their wares, particularly clothing. Even more concerning was the lack of visibility at companies such as Macy’s for the rest of the year. Gap issued a profit warning along with yet another month of falling sales at its three key brands, prompting Fitch to cut the company’s credit rating to junk status. Macy’s said its comparable store sales would drop 3-4 per cent this year instead of a previously estimated 1 per cent. Kohl’s first-quarter sales dropped 3.7 per cent to $3.97bn. Even Nordstrom — whose ability to attract the younger generation of shoppers has helped it outshine rivals — disappointed, with comparable sales falling for the first time in 25 quarters. It also cut its profit forecast for the year and is expecting earnings of $2.50-$2.70 per share compared with its earlier forecast of $3.10-$3.35. The weak earnings highlighted how consumers are increasingly expecting discounts when it comes to buying clothes, while the strong dollar has been putting off tourist spending. However, these traditional retailers have a bigger threat to deal with in Amazon. Morgan Stanley estimates that the online behemoth is the second-largest apparel retailer after Walmart, with 7 per cent of the overall market. ● Related Lex note: US retail — in a box VW’s pay back in spotlight Pay at Volkswagen was back in focus this week after the German carmaker cut its annual bonus payments to staff on Friday by a third in the wake of the emissions scandal. This comes days after it emerged that the hurdles set by management to recoup their withdrawn bonuses would be easy to clear, writes Patrick McGee. Meanwhile the German carmaker on Friday also turned to China to issue its first corporate bond since the scandal, raising Rmb2bn (€270m) by issuing three-year debt — the first time it has sold a renminbi bond. ©AFP VW widely trumpeted last month that €4.2m of management pay was being withheld because of the emissions scandal, but an analysis of the deal reveals that management can actually double the waived amount if VW shares do just moderately well. The agreement the supervisory board reached in late April was that if VW preference shares recover 25 per cent by 2019, management receives the waived bonus back — plus share appreciation and dividends. If shares have not recovered, they receive nothing. “This will present both a risk and an incentive,” Volkswagen said. Crucially, however, the starting point for measuring the 25 per cent rise is just €112 per preference share — the 30-day average to April 22, when VW revealed a €1.6bn net loss for last year. The carmaker said on Friday it will pay its in-house employees a €3,950 bonus for 2015, which is down from the €5,900 that the staff received for 2014. The figure applies to the company’s in-house workers — about 120,000 people. Before VW admitted to equipping 11m diesel cars with emissions test-cheating software, the shares had averaged €208 in 2015, peaking at €255 in April. Christian Strenger, a senior governance expert, called the starting point of €112 “unjustifiably low” as the share price at the time of the board decision was already €126. “For the doubling up of the postponed bonus, which is hard to detect in the annual report, the minimum hurdle should be at least €196. This was average share price of what investors paid in good faith in 2014 and 2015,” he added. “Otherwise it’s ludicrous and would contravene German company law.” Moreover, the terms stipulate that management can double the amount withheld — if shares rise 50 per cent, to €168, according to Mr Strenger’s calculations. Meanwhile, VW renminbi bond issuance on Friday came as latest car sales figures show VW continuing to lose market share in Europe. The carmaker fell to its lowest market share in Europe in four years, after rivals notched up faster sales growth between January and