According to the prosecution, a former Goldman Sachs lawyer and his brother (an ex-Clifford Chance attorney) committed insider trading using confidential information obtained by the elite Wall Street Bank.
Mohammed Zina and his brother Suhail Zina appeared before a jury on Thursday at Southwark Crown Court to begin their trial.
The men have been charged with six counts of insider trading between July 2016 and Dec 2017, as well three counts of fraud relating to the loans they received from Tesco Bank for their trading. The men deny all charges.
This is the highest profile insider trading case brought before the UK Financial Conduct Authority for over four years. According to Peter Carter KC acting for FCA, the brothers profited in the region £140,000 through their trading.
Carter, Carter’s jury, said that the brothers used price-sensitive data “to increase, not guarantee, but really significantly the chances, when they sold their shares, they wouldn’t just get their money returned, they would also get more than what they invested.”
The FCA claims that Mohammed Zina’s offenses occurred when he was working for Goldman in London’s conflict resolution group which has access to insider information. Goldman’s rules on trading with non-public information and its policies regarding confidentiality were explained to the jury.
The FCA reported that they made a loss on their first trade in semiconductor designer Arm, out of a total of six trades.re profitable.
The jury heard Mohammed Zina use three bank accounts to trade, with one opened in his brother Suhail’s name and the other two under Shenaz Chunara, their sister.
Carter told the jury Mohammed Zina was in charge of his sister’s account. He said that Mohammed was sometimes “impatient” because he “got some inside information, and he needed to trade before the information became public.”
Tesco Bank loaned money to fund the accounts, telling the lender that the loans were for “home improvements”. The brothers repaid the first two loans promptly, but were arrested just before they could repay the third.
Fraud carries up to a 10-year maximum sentence, whereas the alleged insider trading in question is punishable by a maximum of seven years.
The trial will run until February 2024.