Ex-Credit Suisse banker found guilty of insider trading
NEW YORK (Reuters) - A U.S. jury on Monday found a former Credit Suisse Group (CSGN.VX) investment banker guilty of insider trading related to a string of corporate takeovers including the $32 billion private equity buyout of power company TXU Corp.
Prosecutors accused Hafiz Naseem, 37, of participating in a scheme that gained $7.5 million scheme from leaking inside information about pending deals by calling a friend in his native Pakistan, who then traded on the unlawful tips.
Naseem was convicted of 28 counts of insider trading and one count of conspiracy to commit securities fraud.
He was taken into immediate custody after prosecutors argued to the judge that Naseem was a flight risk and should be jailed ahead of sentencing.
After the verdict, Naseem's lawyer, Michael Bachner, told the judge he believed "there are substantial issues on appeal here."
The crimes carry a penalty of at least 25 years in prison and deportation, though prosecutors told the judge after the verdict was read that based on federal sentencing guidelines they believe his sentence should be about 12 to 15 years.
Naseem sat impassively beside his lawyer as the jury forewoman in U.S. District Court in Manhattan answered guilty on each of the 29 counts. The jury of eight women and four men had been deliberating since Thursday afternoon.
"We respectfully disagree with the jury's verdict and we believe that Mr. Naseem will be vindicated on appeal," Bachner told reporters after the verdict was read.
The case, with its links to Pakistan and big corporate deals, shows the wide scope of recent insider trading prosecutions brought by U.S. authorities.
Federal prosecutors have announced a string of insider trading cases in the past year, including bringing charges against 13 people in March 2007 at Morgan Stanley (MS.N) and UBS AG's (UBSN.VX) UBS Securities unit.
The trial before U.S. District Judge Robert Patterson follows a mistrial in the case in December, when a different judge found that jurors had failed to follow instructions.
Prosecutors say Naseem fed nonpublic, material information on pending transactions to his friend Ajaz Rahim, a former head of the investment banking group at Faysal Bank Ltd (FYBL.KA) in Pakistan.
A Federal Bureau of Investigation agent testified that Naseem made 150 calls during 2006 and early 2007 to Rahim, some of which were followed by stock trades by the Pakistani banker, based on a review of trading records.
The prosecution said that Naseem was the only CS employee at the New York office who placed calls to Rahim.
Rahim earned at least $60,000 on each illegal trade and as much as $5 million in one case, prosecutors said.
But Bachner told jurors that the case was "nothing more than trial by speculation" since not every call between Naseem and Rahim was followed by an unlawful trade.
There was no way of knowing what other influences Rahim had, Bachner said.
Naseem came to the United States in 2002 to go to business school at New York University, then worked at JPMorgan Chase & Co before joining Credit Suisse in 2006. He is a native of Lahore and now lives in New York City's suburbs.
Naseem was arrested by the FBI last May.
An arrest warrant is pending against Rahim, who is fighting extradition from Pakistan and is not on trial.
Judge Patterson set sentencing for April 7.
Victoria Harmon, a spokeswoman for Credit Suisse, declined to comment.
(Additional reporting by Dan Wilchins)
(Editing by Brian Moss, Phil Berlowitz)
