Trader Charged With Ex-Goldman Banker Fights Extradition
Trader Charged With Ex-Goldman Banker Fights Extradition
(Bloomberg) -- A securities trader fighting extradition on U.S. insider-trading charges told a London court that British prosecutors dropped their own investigation because there was “insufficient evidence.”
Joseph El Khouri, who holds dual Lebanese-British citizenship, was charged by U.S. authorities with making almost $2 million trading on inside information.
Prosecutors allege that El Khouri gave lavish gifts to middlemen, including expensive hotel stays in New York, and a yacht charter in Greece, in exchange for tips as part of an international insider-trading conspiracy.
El Khouri was charged in 2019, along with five other people, including a former investment banker at Goldman Sachs Group Inc., Bryan Cohen. Two of the suspects have been convicted or pleaded guilty, while others have evaded arrest.
But El Khouri told a London court Tuesday that officials at the U.K. Financial Conduct Authority said that when they were pursuing their own investigation, they lacked “a narrator” who could explain the alleged overarching scheme. They discontinued the probe in 2018.
U.S. authorities have since relied upon key witnesses to pursue the ring, saying that members generated tens of millions of dollars on illegal tips about drug companies.
The British investigation was unveiled as El Khouri challenged his extradition to the U.S. The overwhelming majority of the alleged wrongdoing took place in the U.K. and the offenses should be tried here, his lawyer, Clair Dobbin, said.
“It begs the question why the United States has an interest in Mr. El Khouri,” Dobbin said in a legal filing. “The reality appears to be that Mr. El Khouri is a small, unconnected (or tail end) part of a larger insider trading ring.”
El Khouri was charged with 17 counts of securities fraud and wire fraud. The indictment “clearly shows that there is dishonesty here,” Benjamin Seifert, a lawyer for the U.S., told the court.
A spokeswoman for the FCA and Richard Cannon, a lawyer for El Khouri, both declined to comment.
The ring had access to dozens of insider tips and used in-person meetings and “burner” cell phones to avoid detection, the U.S. said. To further cover their tracks, the insiders traded using derivatives that are illegal in the U.S. and hard to track by regulators.
Two of the bankers indicted along with El Khouri, Benjamin Taylor and Darina Windsor, were involved in a romantic relationship and shared a London apartment. They called each other “Pops” and “Popsy” in emails, prosecutors said. Windsor worked at Centerview Partners LLC in London.
In its own investigation, the FCA executed search warrants at Centerview, Dobbin said.
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