Ex-Investment Banker Charged With Leading Insider-Trading Ring
(Bloomberg) — A former investment banker has been accused of helping run 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 made 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 U.S. Department of Justice said in a press release announcing the charges. Khouadja’s lawyer in France, Dominique Inhauspé, declined to comment before speaking to his client.
Prosecutors said Khouadja and two other men led the ring from 2016 to 2024, recruiting investment bankers and other corporate figures who were paid to provide confidential information about publicly traded companies’ financial results and merger activity. Ring members then allegedly conducted transactions over a global network.
According to the indictment, gang members used swipe phones, coded language and encrypted messaging apps to conceal their activities. Tip payments were allegedly made using cash transfers, front companies and fake invoices. Prosecutors said the defendants also leaked the information to journalists for profit after it was published.
Khouadja worked at Merrill Lynch until 2014 before opening the now-closed Paris restaurant Hexagone, where the scheme was allegedly planned.
The gang’s other alleged co-leaders, Eamma Safi and Zhi Ge, were indicted last year. Safi was in US custody and pleaded not guilty in February. Ge was arrested in Singapore, where he is currently fighting extradition to the United States. He has not yet responded to the accusations.
US prosecutors have charged the ringleaders, as well as five others in France, Hong Kong and Singapore, for allegedly agreeing to trade classified information in exchange for a percentage of illicit profits. The Ministry of Justice said that these people were not in custody and were considered fugitives.
Prior to news of LVMH Moët Hennessy Louis Vuitton SE’s acquisition approach, Tiffany & Co. Trader Ronald Cordas, who allegedly helped Safi and Ge raise nearly $8 million by buying and selling their shares, has pleaded guilty and is cooperating with authorities.
Khouadja was charged by authorities in France in 2018 as part of a separate insider trading investigation that focused on questionable profits made by a Geneva-based trader and a leak from a former consultant at Brunswick Group LLP. This investigation was still ongoing as of March and no decision had been made as to whether a hearing would be held.
The case is US v. Safi, 24-cr-10200, U.S. District Court, District of Massachusetts.
–With help from Gaspard Sebag.
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