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A former UBS compliance officer and a day trader are to stand trial on insider trading allegations next year. Fabiana Abdel-Malek,34, who worked at the Swiss bank, and Walid Anis Choucair,38, on Monday pleaded not guilty to insider trading offences in a hearing at Southwark Crown Court.

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Insider activity fell based on filings on the Hong Kong stock exchange from July 24 to 28 with 23 companies that recorded 158 purchases worth HK$119 million versus eight firms with 45 disposals worth HK$55 million. The buy figures were down from the previous week’s 28 companies, 206 purchases and HK$129 million.

On the selling side, the number of firms and trades were down from the previous week’s 13 companies and 63 disposals. The sell value, however, was up from the previous week’s sales worth HK$41 million.

Meanwhile, the buyback activity fell for the third straight week with 14 companies that posted 46 repurchases worth HK$133 million based on filings from July 21 to 27. The figures were down from the previous 5-day period of 15 firms, 86 trades and HK$185 million.

There are four significant points on the recent buyback:

1. The group recorded its first buyback since September 2016

2. The buyback was made after the stock fell by 16 per cent from HK$0.59 in the last week of April

3. The stock rose by 30 per cent from the group’s average buyback price of HK$.45 in September last year to HK$0.59 in April this year

4. The group posted a lower annual loss from the previous year – the company announced in March an annual loss after tax of HK$97.891 million versus a loss of HK$135.12 million in the previous year.

Restaurants and bars operator and security trading firm Dingyi Group Investment bought back 12.8 million shares from July 21 to 26 at HK$1.16 to HK$1.11 each or an average of HK$1.15 each. The group previously acquired 240 million shares from January to August 2016 at HK$0.79 to HK$0.58 each or an average of HK$0.69 each.

Prior to the buybacks since 2016, the group acquired 168 million shares from July to December 2015 at HK$0.51 to HK$0.80 each or an average of HK$0.66 each and 140,000 shares in May 1998 at HK$0.38 each. The stock closed at HK$1.15 on Friday.

There are five significant points on the recent buybacks:

1. The group bought back for the first time since August 2016

2. The buybacks accounted for 36 per cent of the stock’s trading volume

3. The buybacks were made after the stock fell by as much as 24 per cent from HK$1.47 in May

4. This could be the start of another lengthy buyback spree as the group bought shares in every month from July 2015 to August 2016

5. The group posted a lower annual loss from the previous year – the company announced on June 30 a loss of HK$470.281 million versus a loss of HK$507.062 million in the previous year.

There are three significant points on the insider sales:

1. Wu Xiangdong recorded his first trade since his appointment in June 2009

2. The sale reduced his holdings by 39 per cent

3. The disposals were made after the stock rebounded by 42 per cent from HK$17.26 in December 2016. Despite the rebound in the share price, the counter is still down since May 2015 from HK$28.25



An Israeli professor has agreed to pay more than $850,000 to settle U.S. claims he engaged in insider trading in Jerusalem-based Mobileye NV (MBLY.N), a maker of sensors and cameras for self-driving vehicles, ahead of its $15.3 billion takeover by Intel Corp (INTC.O).

According to an agreement filed by the U.S. Securities and Exchange Commission on Monday in Manhattan federal court, Ariel Darvasi, a genetics professor at the Hebrew University of Jerusalem, will pay about $854,000. The agreement must be approved by U.S. District Judge Richard Berman.

According to the SEC, Darvasi began buying Mobileye stock on March 2 after selling 40,000 shares of Teva Pharmaceutical Industries Ltd, the only securities in his account.

The SEC said Waldman conducted most of his Mobileye trading in the six weeks before the Intel Corp deal was announced. The trading began the day Intel and Mobileye signed a non-disclosure agreement, and generated a 1,883 percent return.

Neither Mobileye nor Santa Clara, California-based Intel was accused of wrongdoing.

The case is SEC v Darvasi et al, U.S. District Court, Southern District of New York, No. 17-02088.



Markets regulator Sebi today disposed of proceedings against late Dilip Pendse, former managing director of Tata Finance, in an insider trading case saying a penalty is not imposable as he has already been penalised through earlier orders.

It was alleged that Pendse, in 2001, had facilitated sale of one lakh shares of the company worth Rs 69 lakh held by the then Director J E Talaulicar and his family, while he was in possession of the ‘unpublished price sensitive information’ (UPSI)


The Securities and Exchange Commission takes a fine-toothed comb through any suspicious activity, but rarely do allegations include a suspect searching online how to avoid the agency.

Massachusetts Institute of Technology research scientist Fei Yan was arrested Wednesday on federal charges of insider trading. Prosecutors say Yan searched “how sec detect unusual trade” before he bought numerous stocks and options that netted him around $120,000 in illicit profits.

Yan also searched for phrases such as “insider trading in an international account.”

The SEC alleges that Yan’s profits came from confidential information he obtained from his wife, who was an associate at international firm Linklaters. The London-based law firm announced it suspended Yan’s wife, and will be cooperating with the SECs investigation.

Yan bought holdings in Mattress Firm and Stillwater Mining, both companies his wife’s firm was working with on acquisition deals. After the acquisitions were made public, Yan sold. His wife is not listed in the charges.

To hide his illegal activity, prosecutors say, the Chinese national placed the trades in a brokerage account under his mother’s name.

“Yan attempted to evade detection by researching prior SEC cases against insider traders and using a brokerage account in a different name, but we identified the profitable trades in deals advised by the same law firm and traced them back to him,” said Joseph G. Sansone, co-chief of the SEC Enforcement Division’s Market Abuse unit.

MIT spokeswoman Kimberly Allen confirmed Yan was employed in MIT’s Research Laboratory of Electronics as a postdoctoral associate.

Following his arrest in Massachusetts, Yan was charged with securities fraud and wire fraud. After a hearing in federal court in Boston, authorities released Yan on a $500,000 unsecured bond.

Prison term for ‘brazen’ $45m scheme handed down in spite of high-profile testimonials


SEBI on Wednesday cracked the whip on former MCX and Financial Technologies India Ltd (FTIL) officials for insider trading, which may have helped them avert losses of about ₹125 crore.

The markets regulator has found that key managerial persons of FTIL (63 Moons Technologies) and MCX used Unpublished Price Sensitive Information (UPSI) to sell their shares and avoid losses.

SEBI has impounded the gains made by sale of shares using the information, it said in a release.

Amount to be recovered

The regulator passed an order against Shreekant Javalgekar, Asha Javalgekar, Manish Shah, Prakash Shah, Hariharan Vaidyalingam, V Arvindkumar Iyengar, Dhanashri and Bharat Sheth, former key officials of FTIL, MCX and their relatives.

Finding them “prima facie guilty of insider trading”, the regulator said it has become necessary to take steps to impound and retain the amount they would have lost.

The offenders sold their FTIL shares between August 22, 2012 and March 8, 2013 after a government circular issued on April 27, 2012 banned trading in a group company, NSEL. SEBI believes that the sale of shares by key managerial persons was in the wake of the circular.

“The relatively substantial sale of FTILshares by the aforementioned entities from August 22, 2012 to March 8, 2013, was when in possession of UPSI. The aforementioned entities therefore, engaged in insider trading which is prohibited under the Insider Trading Regulations, 1992 read with the SEBI (Prohibition of Insider Trading) Regulations, 2015,” said a SEBI release.

Responding to the development, 63 Moons put out a release saying: “63 Moons Technologies notes that the order passed today is pertaining to certain individuals and not pertaining to the company. The company will be studying the said order and take necessary action as it may deem fit.”




A former UBS Group AG compliance officer was charged by U.K. regulators with passing tips on five occasions to a London man who traded on the information, according to court records.

Fabiana Abdel-Malek, 34, and Walid Choucair, 38, were each charged with five counts of insider dealing between June 2013 and June 2014, a court clerk said by phone Wednesday, reading charges filed by the Financial Conduct Authority. Abdel-Malek, who has a law degree, had worked as a compliance officer at UBS since 2007, according to her LinkedIn profile, where her surname is listed as Malek.



The Securities Appellate Tribunal (SAT) today admitted Reliance Industries’ (RIL) appeal against a ban on trading in the equity derivatives market for a year imposed by the Securities and Exchange Board of India.

In March, SEBI had ordered RIL to give up the Rs. 447.27 crore of illegal gains it made through the network on trades in 2007 and pay an additional penal interest of 12 per cent per annum from November 29, 2007. RIL and the 12 front entities are also banned from accessing the equity derivatives market for a year.

Counsel for Reliance Industries Harish Salve appealed against the SEBI order at SAT. The next hearing in the case has been posted for early August.

Meanwhile, Salve asked SAT to allow RIL to continue to invest the company’s surplus cash in mutual funds. Some of these funds, he argued, may trade in equity derivatives and this should not be construed as going against the SEBI order.

In its response, counsel for SEBI asked RIL to submit an application to the regulator in this regard with the names of the fund houses that RIL invests in.

Salve added that the company does not have any current F&O positions in equity.

In March, SEBI, under its new chief Ajay Tyagi, had found Reliance Industries guilty of unfair trade practices and “perpetrating fraud in the securities market”, which resulted in “illegal gains” for the company.

The case dates back to March 2007 when the Mukesh Ambani-led Reliance Industries decided to sell five per cent stake in a subsidiary listed company Reliance Petroleum.

However, instead of directly selling shares in the cash market and risking a fall in the price, RIL chose to bet against its subsidiary’s shares in the derivatives market through 12 front entities, according to SEBI’s investigations.

These front entities executed trades in the cash market below the last traded price of the stock, hence triggering a fall in the share price of Reliance Petroleum. This fall in share price allowed them to profit from their own short positions in the derivatives segment to the tune of Rs. 447.27 crore, SEBI found.

According to SEBI’s findings, RIL made illegal gains of Rs. 60.28 a share on 7.42 crore shares.

Reliance Petroleum had merged with RIL in 2009.

An insider is one who because of his status has access to price sensitive information which is not in public domain. James Surowiecki quoted, “If companies tell us more, Insider Trading will be worthless“. Quite precisely, as per Regulation 2 (ha) of the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) Unpublished Price Sensitive Information (“UPSI”) is not generally known to the public. But if known, may likely affect the price of the securities in the capital market.

The issue occurred in February 2007 when alerts were generated at the share market regarding dealing in shares of Indian Petrochemical Corporation Limited (“IPCL”) wherein it was observed that some entities purchased large quantities of IPCL shares before it announced its intention to declare interim dividend and considered to amalgamate with Reliance Industries Limited (“RIL”). In March 2016, SEBI by disposing of the charges of Insider Trading against Reliance Petroinvestments Ltd. (“RPIL”) added further lucidity to the understanding of who an insider may be.

Major Findings

  • RPIL was not an insider as there was no evidence to establish the access of UPSI.
  • RPIL is not a person “deemed to be connected”.
  • RIL did not exercise any voting power in RPIL directly.

Factual Matrix:

  • RPIL, which also held 46% stake in IPCL, took a commercial decision authorizing its Directors to invest INR 30 crores in the equity of IPCL. Further, it made additional investments of up to INR 100 Crore in the equity of IPCL.
  • On March 2, 2007, IPCL made an announcement to the stock exchanges for a declaration of Interim Dividend. It is pertinent to note that the order to purchase 98,280 shares of IPCL were placed before an announcement for a declaration of Interim Dividend was made.
  • On March 4, 2007, the proposal for merger of RIL and IPCL was discussed and on the next day, the steps for initiating the proposed merger were taken.
  • On March 10, 2007, a joint meeting of the boards of RIL and IPCL took place where a joint report was submitted setting out the recommended swap ratio was deliberated on. Subsequently, the Boards of RIL and IPCL approved the merger at their respective Board Meetings.
  • In view thereof, SEBI ordered an investigation in June 2007 regarding buying, dealing or selling in shares of IPCL in order to determine if any provisions of the SEBI Act or Rules and Regulations thereunder were violated.

RPIL’s Plea

  • RPIL submitted that the acquisition of shares in IPCL was a part of creeping acquisition of IPCL which was already underway. For better understanding of the subject matter, creeping acquisition is when any person holds 15% or more but less than 55% of shares or voting rights of a target company (IPCL in the present case), such person can acquire additional shares as would entitle him to exercise more than 5% of the voting rights in any financial year ending March 31 after making a public announcement to acquire at least additional 20% shares of target company from the shareholders.
  • RPIL further added that their investment of INR 30 Crore was a commercial decision as they had made a decision to commence creeping acquisition of IPCL shares. As the investment limit agreed to, was almost exhausted in June 2006. Thereafter, the share prices of IPCL had started to increase and eventually touched INR 325 per share, as a result of which shares were not purchased further.
  • Moreover, RPIL stated that the relevant trade did not take place abruptly, the shares in question were purchased on the basis of the share price of IPCL and in line with the commercial decision of RPIL.
  • RPIL pleaded that the past trading pattern of RPIL in the shares of IPCL should have been taken into consideration by the SEBI to ascertain whether the relevant trades were conducted on the basis of UPSI, as there was no proof incumbent upon it in order to sustain a charge of insider trading.

SEBI’s Observation

The two announcements made by IPCL were not Price Sensitive Information

According to the investigation report (“IR”), RPIL had made two announcements:

  • The order to purchase 98,280 shares of IPCL.
  • An announcement to the stock exchanges for a declaration of Interim Dividend.

The share price of IPCL more or less moved in sync with the movement in Sensex. Wherein, the scrips witnessed a substantial price rise subsequent to the announcement of amalgamation of IPCL with RIL.

RPIL is not an insider as defined in Regulation 2(e) of PIT Regulations

Regulation 2(e) of PIT Regulations stipulate that an insider is one who is or was connected with the company or is deemed to have been connected with the company and is reasonably expected to have access to UPSI in respect of securities of a company, or has had access to such UPSI.

RPIL is not a person ‘deemed to be connected’ within the meaning of Regulation 2(h) of the PIT Regulations

The Adjudicating Officer noted that it is imperative to establish that the same individual or body corporate holds more than a third of the voting rights with respect to both the Companies being examined for the purposes of this clause.

It was found that RIL did not exercise any voting power in RPIL directly, as is evident from the shareholding pattern of RPIL during the financial year 2006-07 and RIL as a single entity did not directly hold the requisite one-third shares in RPIL, as the shareholding of RPIL was cross-held by a number of subsidiaries. Moreover, one-third of the voting right in RPIL were exercised by Reliance Ventures Ltd. and not by RIL.

On the basis of the foregoing findings, the Adjudicating Officer disposed of the Adjudication Proceedings initiated against RPIL.

Key Takeaway

Trading by an insider in the shares of a Company is not in itself violation of law. In fact, trading by the Insiders (directors, employees, officers etc.) is a positive sign which should be encouraged by the Companies as it aligns its interest with those of the insiders. The law on the other hand prohibits trading by an insider in breach of fiduciary and duty of care and confidence towards the stock of a Company on the basis of non-public information to the exclusion of others. Therefore, in our view SEBI action of disposing of the insider trading charges against RPIL holds good. The reason being, PIT Regulations were put in place as a fresh tryout for those having perpetual control over UPSI. As suggested in the Sodhi Committee Report, it placed paramount thrust upon review of empirical evidence and feedback after the concept of trading plan was introduced. In view thereof, the present case at hand goes on to affirm the judicial intent of the PIT Regulation in spirit.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.


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