Friday, July 6, 2007

Indictment of Credit Suisse Investment Banker and Tippee in Pakistan

A grand jury indicted a former Credit Suisse banker for tipping a banker in Pakistan about deals on which the firm had an advisory role before the disclosure of the transaction.  The investment banker was arrested on a criminal information in May 2007 (see earlier post here), and at that time the tippee was unknown.  He has now been identified as a "Country Head of Investment Banking" at Faysal Bank Ltd., headquartered in Karachi, Pakistan, and now living in Canada after resigning from the bank in April 2007 (See Bloomberg story here). 

The indictment, available below, outlines a conspiracy to trade on inside information in which the Credit Suisse banker would call the banker in Pakistan, after which trades were placed in companies that were the targets of takeovers.  The largest deal involved call options in utility TXU before the announcement of its acceptance of a buyout proposal, which generated over $5 million of the alleged $7.5 million in trading profits.  In addition to a conspiracy count, the defendants are charged with twenty-five counts of securities fraud.  The TXU options trades are not included in the substantive insider trading counts because the securities were traded on the options market in Chicago, so there is no jurisdiction over the transactions in the Southern District of New York even though there is on the conspiracy count.  (ph)

Download us_v_naseem_indictment_july_3_2007.pdf

http://lawprofessors.typepad.com/whitecollarcrime_blog/2007/07/indictment-of-c.html

Insider Trading, Prosecutions, Securities | Permalink

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