Mohammed Zina held his head in his hands in the dock at London’s Southwark Crown Court after the jury foreperson repeated “guilty” nine times in answer to each of the charges against him.
The sharply dressed 35-year-old ex-Goldman Sachs analyst was convicted this month of insider dealing and fraud after a nearly trial lasting nearly three months. The following day, he was carted off to HMP Wandsworth, a men’s prison dating from Victorian times in London, to start his 22-month sentence.
“I cannot help but feel pity for you, because you have thrown away what was undoubtedly a promising career in banking,” Judge Tony Baumgartner said as he sentenced Zina on February 16. “Your reputation now is lost, and it is likely you will never be trusted to work in a position of such responsibility again.”
The Zina case — known as Operation Kempston by the FCA — is the first insider dealing conviction the UK Financial Conduct Authority has secured since 2019, and the agency’s new enforcement heads are hoping it will send a message to the City of London that it is serious about the offence, according to Therese Chambers, joint executive director of enforcement and market oversight at the FCA.
“There are many successful professionals across the City who are also in positions of trust and this outcome should be a wake-up call to them that trust is there for a reason, it is not there to be abused,” Chambers said in an interview with the Financial Times on Thursday, her first since taking up the role in April.
Zina’s solicitor declined to comment on his conviction. A spokesperson for Goldman said the bank had “zero tolerance for this conduct”.
After a fallow period for enforcement in the UK during the Covid-19 pandemic, the FCA is showing signs that it is looking to get back on the front foot. The watchdog arrested three London-based individuals on suspicion of insider dealing this month and is in the midst of prosecuting a number of others for the offence.
The FCA currently has 17 insider dealing investigations open, compared with 22 in 2022 and 14 in 2021, according to data provided by the agency.
The regulator has had a mixed record on pursuing insider trading. In the past decade, it has secured the convictions of employees from blue-chip firms including UBS and BlackRock Investment Management. The agency also prosecuted the UK’s biggest-ever insider trading ring — Operation Tabernula — charging nine men, from day traders to a former corporate broker at Deutsche Bank.
Yet, prosecutions have been lacking in recent years and cases it has pursued have not always gone smoothly. Only two of the five men tried in Tabernula were convicted — although another three previously pleaded guilty and one was convicted in absentia — and even the Zina case lost a defendant partway through the proceedings. The watchdog has also faced questions over the credibility of some of its witnesses.
Originally charged alongside his brother, Suhail Zina, a former Clifford Chance lawyer, was acquitted on all nine counts before the trial ended, after the FCA withdrew the fraud counts against him and the judge ruled that there was no case for him to answer on insider trading.
Mohammed Zina had used Suhail’s name, as well as their sister’s, to open trading accounts as a way of disguising his activity from Goldman. He took out loans with Tesco Bank, applying for them on the basis he wanted to finance home improvements, and used the funds in part to place 46 illegal trades through the accounts in his brother’s and sister’s names.
“When this case was opened [ . . .] the narrative upon which you were addressed [was that] this was a joint enterprise between two siblings to purchase property and cars,” said Brendan Kelly KC, defence counsel for Mohammed Zina, in his closing speech. “Well, we now know where one of the siblings sits: he’s not guilty.”
Meanwhile, Fergal O’Driscoll, head of Emea conflicts and reputational risk at Goldman and a prosecution witness, was interviewed by police for possible contempt of court after speaking to another Goldman witness during the trial. A witness for Tesco who was called to testify about the loan applications was described by the FCA’s own lead prosecutor Peter Carter KC as “useless”.
“As with every case, I think we’ll review it and we’ll see what learning comes out of it,” Steve Smart, Chambers’ fellow head of FCA enforcement, said in the same FT interview.
O’Driscoll was found not to be in contempt. Goldman declined to comment on the witness issues.
For Mohammed Zina, the end came in December 2017. In an interview with FCA investigators at a London police station following his arrest, Zina said he had beaten the odds to get a job at Goldman after his dream to become a professional cricketer failed to pan out.
He picked up an investment banking brochure that was lying around in the bedroom he shared with his more academic brother, Suhail, and Goldman was the first name he saw. While at Durham University, he secured a placement year at the bank in its operations division, working daily with agencies like the FCA, he said.
In 2016, two years after he joined the bank full time, Zina was moved into the conflicts resolution group, where he was privy to the inside information that prosecutors accused him of using to trade.
Even after he started at Goldman full time, he worked at Sainsbury’s supermarket at the weekends for a while because “he missed working with ordinary people”, a school friend said in a witness statement.
During the trial, the jury heard how Zina had made about £140,000 in profits from trading on stocks including semiconductor designer Arm and pub company Punch Taverns.
His biggest win was about £55,000 in profit on trades in US food company Snyder’s-Lance.
In his interview, Zina told investigators that his passion for trading had kept him afloat while he was caring for his mother who had cancer and later died.
“On one level this is a tragic story,” said Chambers. “A young man from an ordinary background who has worked very hard to build a prestigious career that he’s thrown away for what he thought was going to be a risk-free profit”.
She added: “The risk equation he obviously got fundamentally wrong.”
Additional reporting by Alistair Gray in London
