As the number of suspect trades in London's stock market surges to its highest level in eight years, one of the country's biggest insider trading trials in recent memory started this week at a courthouse in London’s Southwark Crown Court. In the case, a former UBS compliance officer and star day trader will face a total of 10 counts of insider trading as the FCA pins its enforcement hopes and dreams on a successful conviction - which the agency believes will send a message to other financial criminals in the City that they can face very real consequences, including lengthy prison sentences.
Prosecutors have started unfurling their case, and in one of the first revelations about how Fabiana Abdel-Malek accessed the sensitive information that she eventually passed to her co-conspirator, trader Walid Choucair, between 2013 and 2014, Bloomberg reported that Abdel-Malek accessed information on pending UBS deals via internal "global list" system, which proved to be her undoing, as the bank was able to track and record her searches. She didn't attract suspicion initially because, as one prosecutor pointed out, accessing the list and the information therein was "part of her job" as a compliance officer.
A former UBS Group AG compliance officer repeatedly searched internal databases at the investment bank to see sensitive information about five potential takeovers that she shared with a friend, prosecutors said on the first day of an insider-trading trial.
Fabiana Abdel-Malek gave the information to Walid Choucair, lawyers for the Financial Conduct Authority said Friday. The two often used pay-as-you-go phones, swapping SIM cards in and out, to communicate.
"She was in a position of trust and it was part of her job to access, to view, to read" price sensitive information, said John McGuinness, a prosecutor for the Financial Conduct Authority. "She did it on a regular, if not a daily basis."
The UK has charged Choucair with earning an illicit profit of 1.4 million pounds ($1.8 million) from these tips, The FCA alleged Abdel-Malek obtained the information through her role at UBS. According to BBG, the two are accused of illegally trading shares in Elizabeth Arden, Kabel Deutschland, the REITs BRE Properties and Northstar Realty Finance, as well as US energy company Targa Resources.
As the FT pointed out last week, this is the first insider trading case to go to trial in more than two years, and will be a crucial test of the FCA's ability to win a conviction as it handles a record 87 insider trading investigations. The agency has won more than 30 insider trading convictions since 2009.