U.S. Seeks Break for Swiss Trader Who Made $70 Million Illegally
U.S. Seeks Break for Swiss Trader Who Made $70 Million Illegally
(Bloomberg) -- U.S. prosecutors asked for leniency for a former Swiss trader who admitted raking in $70 million from an international insider trading ring that bridged three continents, generating a fortune in illegal profits from tips stolen by bankers.
Marc Demane Debih was part of a web of inside traders that generated tens of millions of dollars on illegal tips about drug company earnings and acquisitions. He was arrested in Serbia in 2018, then secretly held in U.S. custody before pleading guilty to 38 criminal counts in a hearing in New York that was closed to the public.
Prosecutors on Wednesday said they will ask for leniency for Demane Debih when he’s sentenced Dec. 10, claiming the former trader aided their investigation by incriminating others in the ring. He has also agreed to turn over $49 million.
“Demane provided prompt and substantial assistance in the government’s investigation into a widespread and prolific international insider trading ring that operated in, among other locations, the United States, the United Kingdom, France, Switzerland, Greece, Israel, and Hong Kong,” Assistant U.S. Attorneys Richard Cooper and Daniel Tracer said in a letter to U.S. District Judge Denise Cote in Manhattan.
The charges against Demane Debih grew out of a multinational insider-trading investigation that began in 2013 and became public in 2019 when the U.S. charged six people. Prosecutors invoked a provision that allows Cote to give Demane Debih a reduced sentence. Demane Debih reached a settlement with the U.S. Securities and Exchange Commission this week that bars him from violating securities fraud laws.
Demane Debih’s information helped win three convictions, including that of Bryan Cohen, a former Goldman Sachs Group Inc. banker, who pleaded guilty in January 2020 to passing tips about deals involving Buffalo Wild Wings Inc. and Syngenta AG to Demane Debih. Cohen was sentenced to a year of home confinement.
Demane Debih testified as the star government witness in the January 2020 trial Telemaque Lavidas, the son of a pharmaceutical company director. Demane Debih told jurors that he tapped a safe full of cash to pay off corrupt stock tipsters, used phony invoices for artwork sales to mask some payments and communicated with co-conspirators using prepaid “burner phones.” He also admitted stealing information from his banker girlfriend, planting stories with journalists and disguising illegal trades by using third parties to make share purchases.
Lavidas was convicted of leaking company secrets to a friend who passed them on to Demane Debih. Lavidas was sentenced to a year and a day in prison in July 2020.
Demane Debih also helped lead prosecutors to Dov Malnik and his business partner, Tomer Feingold, Israeli citizens who lived in Geneva. The two men were charged with crimes including conspiracy and securities fraud in a sealed federal indictment that was made public in June. Malnik pleaded guilty in June and was sentenced to 30 months in prison. Feingold isn’t in U.S. custody.
Several of the people who allegedly participated in the ring remain uncharged or beyond the reach of U.S. law enforcement. Darina Windsor, a former investment banker at Centerview Partners, and Benjamin Taylor, who worked at Moelis & Co., are charged with passing tips from their work. The two, who shared a London apartment, have not been arrested by U.S. authorities.
Windsor and Taylor are charged with selling secrets to John Dodelande, a French art collector, who in turn passed tips to Demane Debih for more than $12 million. John Dodelande and brother Kevin Dodelande agreed to cooperate with prosecutors, in a deal that allowed them to keep millions of dollars they made from the ring, according to court papers. They are not charged.
Charged but not in custody is Georgios Nikas, a Greek businessman who owned restaurants in New York. Prosecutors said Lavidas got inside information about Boston-based Ariad Pharmaceuticals Inc. from his father, who was a board member, and passed it along to his friend Nikas, who in turn passed it to Demane Debih.
The case is U.S. v. Demane Debih, 18-cr-184, U.S. District Court, Southern District of New York (Manhattan).
©2021 Bloomberg L.P.
