(Bloomberg) — A former investment banker was charged with helping to hatch a global insider-trading ring from the Paris restaurant he owned.
Samy Fadi Khouadja was named along with seven other men in an indictment unsealed Tuesday by federal prosecutors in Boston. The onetime Merrill Lynch banker was accused of co-leading a group that raked in tens of millions of dollars from insider tips on more than a dozen deals.
Khouadja, 45, is not in custody and is considered a fugitive, the US Justice Department said in a press release announcing the charges. Dominique Inchauspé, a lawyer for Khouadja in France, declined to immediately comment before speaking with his client.
Prosecutors said Khouadja and two other men led the ring from 2016 to 2024, recruiting investment bankers and other corporate insiders who were paid to provide confidential information about public companies’ financial results and merger activity. Ring members then allegedly traded on it through a global network.
The ring members used burner phones, coded language and encrypted messaging apps to conceal its activity, according to the indictment. Payments for tips were allegedly made using cash transfers, shell companies and fake invoices. Prosecutors said the defendants also leaked the information to journalists in order to profit after it was published.
Khouadja worked at Merrill Lynch until 2014 before opening Hexagone, a now-shuttered Paris restaurant where the scheme was purportedly hatched.
The other alleged co-leaders of the ring, Eamma Safi and Zhi Ge, were charged last year. Safi is in US custody and pleaded not guilty in February. Ge was arrested in Singapore, where he is currently fighting extradition to US. He has yet to respond to the charges.
Along with the ringleaders, US prosecutors also charged five people in France, Hong Kong and Singapore, with allegedly agreeing to trade on the confidential information in exchange for a percentage of the illicit profits. Those people are not in custody and are considered fugitives, the Justice Department said.
Ronald Cordas, a trader who allegedly helped Safi and Ge amass about $8 million by trading Tiffany & Co. stock ahead of the news of LVMH Moët Hennessy Louis Vuitton SE’s approach to buy it, has pleaded guilty and is cooperating with authorities.
Khouadja was charged in 2018 by authorities in France as part of a separate insider-trading probe focusing on suspicious gains made by a Geneva-based trader and a leak from a former consultant at Brunswick Group LLP. That investigation was still ongoing as of March and no decision had been made on whether to hold a trial.
The case is US v. Safi, 24-cr-10200, US District Court, District of Massachusetts.
–With assistance from Gaspard Sebag.
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