The US federal prosecutors announced on Tuesday (November 18) in Boston that they have charged eight foreign nationals with manipulating a global insider trading network and illegally profiting tens of millions of dollars. All eight defendants are charged with two counts of conspiracy to commit securities fraud, two counts of securities fraud, and one count of conspiracy to commit money laundering.
According to prosecutors, this insider trading network has been operating since 2016 and was uncovered in 2024. The network was led by three masterminds who personally orchestrated it and recruited multiple investment bankers and corporate insiders who had access to significant material nonpublic information (MNPI) regarding the financial performance and M&A activities of publicly traded companies. The three masterminds allegedly obtained MNPI from these insiders through rewards and other means, and then used this information for trading. They also recruited a network of traders in the United States, Europe, the Middle East, and Asia to participate in the operations.
Court documents revealed that the defendants are accused of leaking information to journalists and media, profiting from market reactions following related reports. Many of the illegal trades were allegedly conducted through an automated trading platform in Massachusetts.
The three main suspects are: 45-year-old Samy Fadi Khouadja from France and the United Arab Emirates, Eamma Safi, 38, from Germany and the United Arab Emirates, and Zhi Ge, 34, from Singapore.
Other defendants include: Christophe Dong, 41, from France, Julien Liu, 35, with French and Hong Kong nationalities, Patrick Chou, 38, from France and Hong Kong, Cheuk Yue Lee, 43, from Hong Kong, and Dev Ananth Durai, 39, from Singapore.
The prosecutors allege that the defendants engaged in trading with MNPI before several company transactions and announcements, illegally profiting tens of millions of dollars.
The traders in the network, including Dong, Liu, Chou, Lee, and Durai, agreed to funnel some of the illegal profits back to the three masterminds. The kickbacks were allegedly paid through cash transfers, third-party payments, or using methods such as shell companies, false loans, and invoices to disguise the nature of the proceeds.
The defendants and other conspirators are accused of taking various measures to conceal their criminal activities from law enforcement and regulatory agencies, including the use of disposable phones, coded language, offline meetings, and encrypted communication channels. They heavily relied on encryption communication applications with features like self-destructing or auto-deleting messages to evade tracking by law enforcement.
All eight defendants are charged with two counts of conspiracy to commit securities fraud, two counts of securities fraud, and one count of conspiracy to commit money laundering.
Presently, only two individuals have been apprehended: Safi is in US custody, while Ge was arrested in Singapore on July 3, 2024, awaiting extradition. The remaining defendants are still at large.
FBI Boston Division Special Agent in charge of the case, Ted Docks, stated, “These eight men are accused of participating in a global fraud operation – using stolen corporate MNPI for trading, making millions of dollars in profits. Their actions appear to have been designed to conceal criminal behavior, showing deliberate disregard for US laws.”
Conspiracy to commit securities fraud carries a maximum sentence of 25 years in prison, five years of supervised release, and a $250,000 fine or double the illegal gains (or victims’ losses), whichever is greater.
Securities fraud can result in a maximum sentence of 25 years in prison, along with a five-year term of supervised release, and a fine of up to $5 million.
Each defendant is charged with one count of conspiracy to commit money laundering, carrying a maximum sentence of 20 years in prison, an additional three years of supervised release, and a fine of up to $500,000 or twice the value of the property involved, whichever is higher.
Safi and Ge were separately indicted by the prosecutors and a Boston federal grand jury in 2024, also charged with one count of money laundering.