U.S. authorities unveiled a series of charges against a pair of traders allegedly involved in a global insider trading ring that made millions trading on inside information gleaned from corporate insiders and investment bankers.
In a 15-count indictment filed in a Manhattan federal court, a pair of Israeli citizens, Dov Malnik and Tomer Feingold, were charged with a variety of offences connected to the alleged international insider trading scheme.
According to the indictment, the pair traded on insider tips obtained from an unnamed co-conspirator in Switzerland who shared information collected from insiders at two different global investment banks, as well as publicly traded companies, about pending M&A deals and other market-moving news.
U.S. authorities alleged the traders and their sources at the investment banks sought to cover their tracks by using multiple burner cellphones and encrypted messenger apps to communicate, while also routing their trades through various offshore shell companies and generating fake consulting invoices to pay their sources. They allegedly paid for the tips with insider trading profits.
Malnik, who was arrested in Switzerland last year and extradited on June 10, pleaded guilty to one count of securities fraud. Feingold remains at large.
Last year, Bryan Cohen, an investment banker, pleaded guilty to one count of conspiring to commit securities fraud for providing inside information, and Telemaque Lavdias, a pharmaceutical company executive, was convicted of illegally passing on tips and was sentenced to a year in jail.