Thursday, October 29, 2020

Insider trading ring charged over illicit profits of millions of dollars


U.S. prosecutors said they had charged six members of an insider trading ring who worked for firms including Goldman Sachs Group (GS.N), Moelis and Centerview Partners and allegedly booked tens of millions of dollars in illicit profits.

The U.S. Attorney’s Office for the Southern District of New York has arrested three members of the international ring and unsealed four separate indictments in recent days.

The bankers and others all booked trading profits off nonpublic information related to deals including acquisitions, the prosecutors said in a statement.

They said Benjamin Taylor, formerly an employee of investment banking firm Moelis, and Darina Windsor, a former employee of boutique investment bank Centerview Partners, obtained and leaked nonpublic information about publicly-traded companies to securities dealers.

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The bankers shared in the profits from the trades beginning in at least January 2013, authorities said in an indictment unsealed on Monday.

That included profits from buying shares of biotech firm InterMune Inc ahead of a 2014 announcement of an $8.3 billion acquisition by Roche Holding AG (ROG.S); profits from shares of Onyx Pharmaceuticals before news reports in June 2013 that it would be purchased by Amgen (AMGN.O) for $10.4 billion, and profits off shares of Pharmacyclics ahead of an announcement it would be purchased by AbbVie Inc (ABBV.N) for $21 billion in 2015.

Windsor and Taylor, who were romantically involved, “repeatedly accessed internal electronic files” of their employees, including files relating to business deals on which they were not involved, the authorities said.

A Moelis spokeswoman confirmed Taylor had been a “junior employee.” A Centerview spokesman said Windsor, also a “junior employee,” was terminated nearly four years ago for misconduct.

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Securities trader Joseph El-Khouri was arrested on Monday in the United Kingdom. He allegedly received leaked information from Windsor and Taylor, which he then passed along to journalists.

El-Khouri and an unnamed trader built up long positions in companies targeted for acquisition, court documents said. El-Khouri realized over $2 million in illicit gains trading securities of at least six different companies, according to the documents.

Bryan Cohen, a banker who worked for Goldman Sachs, was arrested on Friday.

Cohen shared inside information with a securities trader named Georgios Nikas, who is also an owner of a chain of Greek restaurants in New York, prosecutors said.

From December 2012 through 2017, Nikas and another trader obtained information from Taylor, Windsor and Cohen, prosecutors said.

They said Nikas also received information from Telemaque Lavidas, the son of a member of the board of directors at Ariad Pharmaceuticals Inc. Lavidas was arrested on Friday.

The U.S. Securities and Exchange Commission said in a separate statement on Tuesday it had obtained an order freezing Nikas’s assets. The SEC had filed an emergency action charging Cohen and Nikas on Oct. 18.

Nikas, Taylor and Windsor remain at large, the U.S. Attorney’s office said. None of the defendants could be reached immediately for comment.


Source: Reuters


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