Ex-Credit Suisse Banker Gets 10 Years Jail Sentence
A former Credit Suisse investment banker convicted of leaking inside information about pending mergers was sentenced to 10 years in prison by a federal judge Friday.
Hafiz Naseem, 37, who had worked at the bank's Global Energy Group in New York from 2006 until early 2007, was found guilty in Manhattan federal court in February of participating in a $7.5 million trading scheme.
At trial, prosecutors said Naseem leaked confidential information about takeovers, including the $32 billion private equity buyout of power company TXU Corp, to a friend in his native Pakistan, who then traded on the illicit tips.
Naseem was convicted of insider trading and conspiracy to commit securities fraud.
Prosecutors had argued that "a substantial sentence is necessary to send a message to Naseem, others on Wall Street and in similar positions where client confidences are absolutely necessary and required for the security of our capital markets," according to court documents.
U.S. District Judge Robert Patterson agreed, saying a heavy sentence was needed to deter future crimes. "It happens too much," he said. "It's a behavior that has to be deterred."
Naseem's lawyer, Michael Bachner, called the sentence excessive and said he would appeal. "I think the sentence is excessive, unnecessary to serve the interests of justice and we respectfully disagree," he told reporters outside the courtroom.
Bachner had asked for leniency on the basis that Naseem has "extraordinary family responsibilities," including a young daughter with cerebral palsy. He also argued there was no evidence Naseem profited financially from the scheme.
Prosecutors countered that Naseem received nearly $200,000 in wire transfer payments during the course of the trading conspiracy.
The money appeared related to the plot, not money transfers from Naseem's father raised through legitimate means, as the ex-banker had argued, the prosecutors said.
Naseem, who appeared calm and only shook his head slightly as the sentence was read, has been in custody since he was found guilty. Naseem was arrested in May 2007.
At trial this year, he was found guilty of feeding nonpublic material information to Ajaz Rahim, a former head of the investment banking group at Faysal Bank in Pakistan. Rahim was not on trial. An arrest warrant is pending against him.
The case, with its links to Pakistan and big corporate takeovers, has shown the far reaching scope of insider trading prosecutions brought by U.S. authorities in recent years.