SEC Spans Globe, Uncovers Another Alleged Front-Running Scheme
Spanning the globe to uncover a constant variety of insider-trading schemes, the SEC announced Thursday that U.S. prosecutors had charged a former Credit Suisse investment banker with 25 counts of securitizes fraud for allegedly leaking tips ahead of nine acquisitions to investors who used the tips to profit illegally. The alleged culprit was based in New York. One of the alleged tippees lived in Pakistan. And the SEC received cooperation from, among other regulatory authorities, the Swiss Federal Banking Commission and the Financial Services Authority of the United Kingdom, to piece together phone and brokerage records from across the globe.
This represents the second major front-running case the SEC has pursued this year. Earlier this spring, the SEC opened an investigation into allegations that Wall Street bank employees, including those at Merrill Lynch, Morgan Stanley and Deutsche Bank, were providing tips ahead of takeovers and changes in analyst ratings to favored clients, such as hedge funds, in an effort to gain favor with those clients. "The SEC has made insider trading ahead of mergers and acquisitions one of its top priorities," said Linda Thomsen, Director of the SEC's Division of Enforcement.
To read more about the SEC’s most recent front-running charges, see this story from Bloomberg.