SEC Charges Two Bankers and Trader in Serial International Insider Trading Scheme
Litigation Release No. 24650 / October 22, 2019
Securities and Exchange Commission v. Benjamin Taylor, Darina Windsor and Joseph Abdul Noor El-Khouri, No. 1:19-civ-09744 (S.D.N.Y. filed October 22, 2019)
The Securities and Exchange Commission today charged two former investment bankers and a London-based trader in connection with a long running international insider trading scheme. The trader allegedly generated profits of more than $2 million trading in the securities of U.S. public companies in advance of news that these companies had been targeted for acquisition.
According to the SEC's complaint filed in federal court in Manhattan, Benjamin Taylor and Darina Windsor, obtained nonpublic information about at least fifteen potential acquisitions and tender offers through their respective positions as investment bankers in the London offices of two investment banks. During the early phases of the scheme, Taylor obtained confidential deal information from his own employer and provided tips in exchange for cash payments. Taylor also regularly obtained information from his then-girlfriend Windsor who actively sought out confidential information including by accessing documents about transactions on which she was not staffed. As alleged in the complaint, Taylor tipped the information directly or indirectly to Joseph Abdul Noor El-Khouri and/or another trader who collectively traded in advance of at least fifteen different acquisition announcements. El Khouri, who resides in Monaco and London, allegedly used the information to net over $2 million in illicit profits trading Contracts for Difference and spread bets based on securities of at least six U.S. companies that were about to be acquired.
The case originated from the SEC Market Abuse Unit's Analysis and Detection Center, which uses data analysis tools to detect suspicious patterns, such as improbably successful trading across different securities over time. Enhanced detection capabilities enabled SEC Enforcement staff to spot the unusual trading activities alleged in the SEC's complaint.
In a parallel action, the U.S. Attorney's Office for the Southern District of New York today announced criminal charges against Taylor, Windsor and El Khouri.
The SEC's complaint charges Taylor, Windsor and El Khouri with violations of the antifraud provisions of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. The SEC seeks disgorgement of ill-gotten gains plus interest, penalties, and injunctive relief.
The SEC's investigation was conducted by Caitlyn M. Campbell, David Makol, John Rymas, and Assunta Vivolo, of the Market Abuse Unit, Michael Foster of the Chicago Regional Office and Rua Kelly of the Boston Regional Office, with assistance from Darren Boerner of the Market Abuse Unit, James D'Avino of the New York Regional Office, and Carlos Costa-Rodrigues, Marlee Miller and Matthew Greiner in the Office of International Affairs. This case has been supervised by Joseph G. Sansone, Chief of the Market Abuse Unit. The litigation will be led by Mr. Foster and Ms. Kelly. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, the Federal Bureau of Investigation, the Financial Industry Regulatory Authority, the Danish Financial Supervisory Authority, the French Autorit© des March©s Financiers, the Monetary Authority of Singapore, the Swiss Financial Market Supervisory Authority and the United Kingdom Financial Conduct Authority.