A employee of the Global Energy Group of Credit Suisse was arrested and charged for his role in an alleged scheme using material nonpublic information on nine merger transactions involving Credit Suisse clients to obtain over $7.5 million in profits. The Securities and Exchange Commission also brought charges against the country head of investment banking at the Pakistan-based Faysal Bank.
Prosecutors said the Faysal Bank agent traded on tips about forthcoming announcements on acquisitions of publicly traded companies Northwestern Corp., Energy Partners Ltd., Veritas DGC Inc., Jacuzzi Brands Inc., Trammell Crow Co., Hydril Co., Caremark Rx Inc., John H. Harland Co., and TXU Corp. Credit Suisse advised either the target company or the acquiring entity in transactions involving each of those companies, they said.
Based on tips from the Credit Suisse employee, the Pakistani banker allegedly purchased securities in advance of a public disclosure, then quickly sold the securities once the public disclosure of an acquisition was made. Through dozens of transactions, including trades in an offshore account, the alleged scheme netted more than $7.5 million in profits, prosecutors charge.
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