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A former Goldman Sachs analyst accused of insider trading with his brother was made aware of the “perils” of using privileged information before the alleged crimes happened, according to the prosecution at a London trial.
Mohammed Zina undertook compliance training at the Wall Street bank weeks before he joined Goldman’s London conflict resolution group in 2016, which is privy to inside information. The training warned of the dangers of insider dealing and made clear that preapproval was required for any trading he did, according to documents shown in court on Monday.
“[He] can’t say he wasn’t warned,” Peter Carter KC, the prosecutor acting for the Financial Conduct Authority, told the jury at Southwark Crown Court. “[He was made aware of] all the perils of using inside information.”
Zina, 35, is on trial with his brother Suhail Zina, 36. The pair are accused of insider dealing in six stocks between July 2016 and December 2017, and three counts of fraud in relation to loans they obtained from Tesco Bank, charges they deny. The prosecution’s comments form part of its opening statement in the case, which started last week.
The jury on Monday was shown snapshots from searches made by Mohammed Zina on his computer, including a December 2016 article he looked at about a US insider dealing case involving two brothers. The article was read to the jurors by Carter.
The New York Times story was an account of a victory by prosecutors in a Supreme Court case centred on insider dealing. The trial involved two brothers who had passed information between each other before giving it to the future brother-in-law of one of them to trade on.
“Why did it have such resonance for him?” said Carter of the article. “We say it’s obvious. It didn’t stop him.”
The prosecution told the jury that Suhail Zina had also undertaken compliance training on insider trading at his then-employer Clifford Chance.
Suhail Zina was a trainee solicitor at the “magic circle” firm between February 2015 and February 2017 before moving into its property finance department upon qualification.
WhatsApp messages between the brothers about the trading and Tesco loans intimate that Suhail knew Mohammed was using inside information, said Carter.
“These little snippets of information are really the indication of what was known, what had to be said, what didn’t have to be said . . . to keep each other in the know,” he told the jury.
The jury was told last week that the brothers made profits in the region of £140,000 from their dealing. The alleged insider trading in question carries a maximum penalty of seven years in prison, while fraud carries a maximum sentence of 10 years.
The trial continues.
