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A former Goldman Sachs analyst and his brother, an ex-Clifford Chance lawyer, committed insider dealing using confidential information obtained from the elite Wall Street bank, according to the prosecution at a London trial.
Mohammed Zina, 35, and his brother Suhail Zina, 36, appeared in the dock before a jury at Southwark Crown Court on Thursday for the opening of their trial.
The men are accused of six counts of insider dealing between July 2016 and December 2017, as well as three counts of fraud related to loans they obtained from Tesco Bank to fund their trading. They deny the charges.
The case is the most high profile criminal trial of insider trading brought by the UK’s Financial Conduct Authority in over four years.
The brothers made profits in the region of £140,000 from their dealing, according to prosecutor Peter Carter KC, acting for the FCA.
The brothers used the price-sensitive information “to give, not a assure, but to enhance the chances really significantly that when they sold the shares they wouldn’t simply get their money back, they would get more than they invested,” Carter told the jury.
The FCA alleges that the offences took place when Mohammed Zina was working in Goldman’s London conflict resolution group, which is privy to inside information. The jury was taken through Goldman’s policies on confidentiality and rules against trading on non-public information.
Their first trade, in semiconductor designer Arm, was the only trade out of the six that resulted in a loss, according to the FCA.
The jury heard that Mohammed Zina used three bank accounts for the trading, one of which was opened in his brother Suhail’s name, and the other two in the name of their sister, Shenaz Chunara.
Carter told the jury that Mohammed Zina oversaw his sister’s accounts, and that messages will show Mohammed sometimes got “impatient” with her “because he got some inside information and he had to trade while the information was still inside before there was a risk of it becoming public.”
The accounts were funded using the Tesco Bank loans, which the lender was told were obtained for ‘home improvements’. The brothers paid back the first two loans quickly but were arrested before the third one could be repaid.
The alleged insider dealing in question carries a maximum penalty of seven years in prison, while fraud carries a maximum sentence of 10 years.
The trial is due to run until the end of February 2024.
