Ex-Citi banker's alleged ties at issue in insider trading appeal

When prosecutors knew about possible links between a former Citigroup banker and a wealthy businessman will be one of the issues reviewed during an appeal in the UK's highest-profile insider trading case.

Walid Choucair, a day trader, and Fabiana Abdel-Malek, a former UBS Group AG compliance officer, won the right to appeal on grounds that a potentially important alternative source of information on a series of M&A deals may have been wrongly withheld, according to people familiar with the matter. It's one of seven grounds that were accepted for argument by the Court of Appeal.

The appeal will focus on when the Financial Conduct Authority knew about the alleged contact with an intermediary of the Citigroup banker and a businessman, who was a friend of Mr Choucair's, according to the people, who asked not to be identified because the grounds of the appeal weren't public.

Mr Choucair, who was convicted along with Ms Abdel-Malek, consistently argued at a pair of trials that Ms Abdel-Malek never gave him confidential information and he instead got tips from other traders and journalists.

The two trials – the first ended in a hung jury – opened a window into a loose network of traders from London to Dubai as well as a multinational investigation into suspected insider trading.

Granted bail

Mr Choucair and Ms Abdel-Malek, who were serving three-year sentences, were granted bail last week pending the full appeal, which could be heard in July. Ms Abdel-Malek was convicted of leaking tips from the bank's database to Mr Choucair, who allegedly traded on the information within minutes.

They both denied the charges.

The crux of the appeal will focus on the events leading up to the closing days of the trial last year. Just before Mr Choucair was set to be cross-examined, his lawyer told the jury about another FCA investigation.

He told the jury that the FCA had just disclosed that it had looked at claims that an employee at Citigroup with access to "price-sensitive information" communicated through an intermediary with Alshair Fiyaz, a wealthy businessman and trader who was regularly mentioned in the trials.

The Choucair appeal will review whether the FCA should have released that information sooner, according to the people familiar with the case. The FCA note, read to jurors by Mr Choucair's lawyer, didn't say that Mr Fiyaz had received information from the Citigroup source.

Mr Fiyaz, who was never accused of wrongdoing by prosecutors, was unaware of the grounds for appeal, according to a spokeswoman.

"Mr. Fiyaz vehemently denies any involvement in insider dealing, whether in relation to this case or otherwise," the spokeswoman said in a statement. "He has never been charged with any offense relating to insider dealing or indeed, any other form of misconduct."

The Citigroup banker didn’t have computer access to data about the transactions Choucair was charged with trading on illegally but may have been in a position to access price-sensitive information, the FCA said in the statement read to the jury.

Intermediary

Mr Choucair's appeal will explore the disclosure of information about the alleged relationship between Mr Fiyaz and the intermediary, who is also a former Citigroup banker, according to the people.

The FCA and Citigroup declined to comment, as did lawyers for Mr Choucair and Ms Abdel-Malek.

As part of the decision allowing the appeal to proceed, the FCA was told to turn over more information on when it knew about possible alternative sources for the information on deals Mr Choucair traded on by May 22.

During the trial, Mr Choucair said he often discussed trades with Mr Fiyaz, who was so successful he'd bought billionaire Roman Abramovich's 86-meter superyacht and a polo club in St Tropez.

The FCA said it investigated the matter after receiving a tip from an informant on May 14, 2019. The statement about the situation was read to jurors by Mr Choucair's lawyer about two weeks later, in the middle of Mr Choucair's testimony.

The grounds of appeal may enable Mr Choucair and Ms Abdel-Malek to argue that the agency could have disclosed the information far earlier, even before the trial began.

Bloomberg