A former Credit Suisse Group investment banker accused of insider trading left his electronic fingerprints all over the $7.5 million scheme, a federal prosecutor told jurors in closing arguments on Wednesday.
Hafiz Naseem, 37, is charged with criminal conspiracy and securities fraud. He repeatedly leaked inside information about pending corporate deals by tapping into Credit Suisse's computer files and then calling a friend in his native Pakistan who traded on the unlawful tips, Assistant US Attorney Reed Brodsky said.
"He left an electronic trail of what he was doing," the prosecutor told jurors in US District Court in Manhattan. Naseem's lawyer, Michael Bachner, is scheduled to give his closing statement on Thursday morning.
Naseem worked in Credit Suisse's Global Energy Group from 2006 until early last year. Prosecutors say he fed non-public, material information on pending transactions to Ajaz Rahim, a former head of the investment banking group at Faysal Bank Ltd in Pakistan. Among those deals, prosecutors contend, was the $32 billion private equity buyout of power company TXU Corp. An arrest warrant is pending against Rahim, who is fighting extradition from Pakistan and is not on trial.
If convicted, Naseem could face at least 25 years in prison and deportation. During two weeks of testimony, government witnesses included a colleague at Credit Suisse who said he at one point found Naseem rummaging through his desk.
Also, a Federal Bureau of Investigation agent testified that Naseem made 150 calls in the span of a year to Rahim that were followed by stock trades by the Pakistani banker, based on a review of trading records. No other Credit Suisse employee in New York had any telephone contact with Rahim during that time, according to the bank's telephone records cited by the prosecution.
On one occasion last February, Naseem opened an internal Credit Suisse computer file about the pending TXU buyout - a deal that Naseem was not working on - and "within six minutes of reading that document, the defendant called his friend, Ajaz Rahim," Brodsky said.
Rahim earned at least $60,000 on each illegal trade and as much as $5 million in one case, Brodsky said. In all, "they hit the jackpot nine times," he said. "Every time the defendant told Rahim about secret information at Credit Suisse, the defendant committed a crime." Naseem was arrested by the FBI in May in a case that highlights the international scope of some insider trading investigations.
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