TESCO BANK FUNDS “INSIDER DEALING” WITH LOANS FOR HOME IMPROVEMENTS!!

Mohammed Zina [35-year-old] an ex-Goldman Sachs analyst was convicted this month of insider dealing and fraud after a trial lasting nearly three months. He was sentenced to 22-month.

During the trial, the jury heard how Zina had made about £140,000 in profits from trading on stocks including.

• Semiconductor designer Arm and pub company Punch Taverns.
• His biggest win was about £55,000 in profit on trades in US food company Snyder’s-Lance.

Mohammed Zina was originally charged alongside his brother, Suhail Zina, a former Clifford Chance lawyer.

Suhail was acquitted on all nine counts before the trial ended,

• After the FCA withdrew the fraud counts against him and
• The judge ruled that there was no case for him to answer on insider trading.

The Zina case — known as Operation Kempston by the FCA — is the first insider dealing conviction the UK Financial Conduct Authority has secured since 2019.

TESCO’S INVOLVEMENT

Mohammed Zina used his brother [Suhail’s] name, as well as their sister’s, to open trading accounts as a way of disguising his activity from Goldman.

He took out loans with Tesco Bank,

• Applying for them on the basis he wanted to finance home improvements, and
• Used the funds in part to place 46 illegal trades through the accounts in his brother’s and sister’s names

• https://www.judiciary.uk/wp-content/uploads/2024/02/R-v-Zina.pdf

A witness for Tesco who was called to testify about the loan applications was described by the FCA’s own lead prosecutor Peter Carter KC as “USELESS”.

THE FCA & INSIDER DEALING

• After a fallow period for enforcement in the UK during the Covid-19 pandemic, the FCA is showing signs that it is looking to get back on the front foot.
• The watchdog arrested three London-based individuals on suspicion of insider dealing this month and is in the midst of prosecuting a number of others for the offence.
• The FCA currently has 17 insider dealing investigations open, compared with 22 in 2022 and 14 in 2021, according to data provided by the agency.
• The regulator has had a mixed record on pursuing insider trading.
• In the past decade, it has secured the convictions of employees from blue-chip firms including UBS and BlackRock Investment Management.
• The agency also prosecuted the UK’s biggest-ever insider trading ring — Operation Tabernula — charging nine men, from day traders to a former corporate broker at Deutsche Bank.
• Yet, prosecutions have been lacking in recent years and cases it has pursued have not always gone smoothly.
• Only two of the five men tried in Tabernula were convicted — although another three previously pleaded guilty and one was convicted in absentia —

SOURCE

https://www.judiciary.uk/wp-content/uploads/2024/02/R-v-Zina.pdf

https://www.ft.com/content/c31a63e5-c5aa-4f5a-9a44-23f863c315f3