A flamboyant multimillionaire trader bribed an employee at the UK’s serious crime-fighting agency and potentially compromised a criminal investigation by the financial watchdog, it was alleged by a convicted insider trader before his jury trial.
Alshair Fiyaz, who owns the St Tropez polo club, “paid off” a French-Pakistani translator at the National Crime Agency and received tips on the status of an insider-trading investigation by the NCA and Financial Conduct Authority, it was alleged in court proceedings that can only now be reported.
Walid Choucair, a day trader convicted of insider trading this week, alleged last year that Mr Fiyaz had paid money to unnamed “sources” within the two UK agencies to prevent his arrest as part of that investigation.
Choucair was convicted of receiving inside information from a former UBS compliance officer, Fabiana Abdel-Malek, in one of the only insider-trading cases brought by the FCA in more than three years. The pair were sentenced to three years’ imprisonment on Thursday after an eight-week retrial, following a hung jury in December.
The FCA alleged Abdel-Malek passed Choucair confidential tips on deals UBS was working on, using burner phones with multiple SIM cards and meeting in Tramp, the London members’ nightclub. Choucair would go on to trade successfully using the inside information, netting himself £1.4m.
The FCA and NCA’s investigation related to international probes into a group of traders, with US and French authorities also believed to be investigating, Choucair’s legal team alleged before the first trial began in late 2018.
They argued that the alleged corruption of the UK investigation could constitute an abuse of process in the prosecution and alleged that Choucair received market colour and trading ideas from Mr Fiyaz, rather than Abdel-Malek being a source of information for his trades.
“The allegations are that elements within the FCA and NCA have behaved improperly and unlawfully,” Richard Wormald QC, Choucair’s barrister, told the court during the August hearing, which the media was prevented from reporting until the conclusion of the trial. “There plainly was a corrupt source or sources [within the agencies].”
Mr Wormald added that the bank accounts of one of the French-Pakistani translators at the NCA should be examined “to see who had paid for her mortgage”.
Ben Russell, Deputy Director of the National Economic Crime Centre, which is part of the NCA, said any allegation of corruption is reported to the National Crime Agency Anti-Corruption Unit, which routinely undertakes “a thorough and detailed investigation”. He added: “We are committed to leading the UK’s fight against serious and organised crime — we do not tolerate unlawful behaviour, misconduct or dishonesty within the agency.”
Mr Fiyaz vigorously denies the corruption allegations. His legal team said he has never been questioned, let alone charged, over the accusations.
Judge Joanna Korner dismissed the abuse arguments. She ruled in August that material held at the time by the authorities did not provide a defence to Choucair or give him the opportunity to mount an abuse-of-process argument.
In her ruling she summarised Choucair’s allegations that Mr Fiyaz had told him that Mr Fiyaz “would not be prosecuted as he had paid ‘enough money to the sources he had within the investigating agencies to prevent his arrest’.”
John McGuinness QC for the FCA said during the August hearing that alleging corruption is “the oldest ploy in the world when you don’t have a defence: ‘He’s in the dock because he didn’t pay the bribes’.”
During the retrial, proceedings had to be temporarily halted after the FCA received an allegation that Mr Fiyaz had a potential intermediary with a source at Citigroup. Mr Wormald told the jury that the US bank worked on the same deals included on the indictment against his client as UBS.
Inquiries conducted by the FCA identified a person believed to be the alleged source at Citi with access to price-sensitive information during the period covered by the indictment, according to facts put before the jury. But the FCA’s inquiries found that the person did not have computer access to inside information about the five stocks in the indictment against Choucair and Abdel-Malek.
The jury was played a clandestine recording of part of a conversation between Choucair and Mr Fiyaz, who “at that time . . . was the subject of a surveillance operation,” the court was told.
During both trials, the juries heard that Mr Fiyaz and Choucair would try to get stories placed in the media about a company whose shares they wanted to invest in ahead of a prospective takeover. The media outlets targeted included the Financial Times and Bloomberg News.
“So he [Mr Fiyaz] would buy the stock, contact would be made, there would be press coverage, the price would rise — that’s market manipulation isn’t it?” Mr McGuinness asked Choucair during his first cross-examination. “The journalist would write a story and the price would go up . . . That would result, would it not, in a profit?”
Choucair denied that he or Mr Fiyaz engaged in market manipulation.
According to a ruling in the case, the FCA disclosed that Mr Fiyaz has been the subject of 73 suspicious activity reports, which banks and other institutions must file if they suspect questionable activity.
Mr Fiyaz’s legal representatives have said that the number of SARs relating to distinct trades was 27, and underscored that any transactions over £10,000 trigger such a report. “As a percentage of our client’s total trades the number of SARs to which he has been subject is tiny and no action has ever been taken against him in relation to any of them,” they added.
Mr Fiyaz was not a party to the proceedings and was unable to challenge the allegations in court. He was not named in the FCA’s indictment. His representatives called Choucair’s allegations that implicated Mr Fiyaz with insider trading as “untrue and scurrilous”, adding it was clear they had been “unequivocally rejected” by the jury.
“Mr Fiyaz has never been questioned, charged or convicted of insider dealing or financial misconduct of any kind in the UK or any jurisdiction,” said Mr Fiyaz’s representatives after the trial. “He has never been the subject of any adverse regulatory findings at the hands of the FCA, the Securities and Exchange Commission or any other regulatory body.”
Choucair’s allegations against Mr Fiyaz and the NCA official were “false and malicious,” Mr Fiyaz’s representatives said, adding that “the judge refused Mr Choucair permission to put this dishonest allegation before the jury”.
In convicting the defendants, it appears the jury agreed with the prosecution’s allegations that Choucair’s insider was Abdel-Malek.
Allegations of corruption at two of the UK’s main fighters of financial crime are an unwelcome distraction as the country tries to burnish its credentials as tough on dirty money.
The FCA said in a statement: “Allegations are often made against investigators by those who are charged with very serious offences. They are usually without any substance and intended to distract. Allegations against the FCA in this case were not supported with any evidence and had no substance.”
During Choucair’s trial, the jury heard that he would regularly contact other traders around the world, including Alexis Kuperfis and Nathaniel Glas in France, as well as Mr Fiyaz. Mr Kuperfis is the subject of an insider-trading probe by the French authorities, according to court documents. Being subject to such an investigation does not imply any guilt. Mr Kuperfis’s lawyer declined to comment.
Another trader mentioned during the trial, Yomi Rodrig, had been arrested and questioned on suspicion of insider trading, the court was told in a hearing earlier this year. He was not charged with any offence and was not a party to the trial.
