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Insider dealing convictions upheld by the Court of Appeal

On 16 December, the Court of Appeal (Criminal Division) upheld the convictions of Fabiana Abdel-Malek and Walid Choucair for insider dealing.

After an FCA investigation and a trial at Southwark Crown Court, in June 2019, Fabiana Abdel-Malek and Walid Choucair were each convicted of five offences of insider dealing in 2013/4 and were sentenced to 3 years’ imprisonment. They appealed their convictions alleging insufficient disclosure by the FCA before, during and after the trial made their convictions unsafe and they were released on bail pending the court's decision.

The Court of Appeal dismissed the appeals and found there was no irregularity or unfairness.     

In delivering judgment, Davis LJ remarked that;

“This was…a powerful case which in reality called for an explanation from each of the appellants at trial. They gave their explanations over many days of oral evidence. The jury, having evaluated their evidence, did not believe them. The jury were made sure, on all the evidence, that the counts of insider trading on the indictment had been proved.”

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, yesterday said:

”I welcome the Court’s decision to dismiss these appeals as well as the Court’s finding that there was no irregularity or unfairness in the proceedings. The appeal was an attempt to undermine the jury’s verdict by collaterally attacking the FCA. Today’s decision by the Court vindicates the FCA’s decision-making in this matter.  

“The case also demonstrates the FCA’s determination to ensure those who abuse our markets, like these defendants, are held to account in accordance with the law, especially given deliberate abuse of trust and the use of sophisticated tactics to avoid detection.”

Ms Abdel-Malek and Mr Choucair must now complete their sentences of imprisonment. They are now required to surrender to custody to serve the remainder of their sentences.

Ms Abdel-Malek (17/09/1982) was employed as a senior compliance officer by the investment bank UBS AG in their London office and abused her position to access inside information on UBS AG compliance systems which she passed to her family friend Mr Choucair (04/03/1979), an experienced day trader of financial securities.

The jury convicted Ms Abdel-Malek of passing inside information to Mr Choucair in respect of five transactions; which she had no business reason to access.  Mr Choucair’s profit was approximately, £1.4 million from the trading that was the subject of the five charges. 

The FCA’s case relied on: 

  • the fact that Choucair made a substantial profit in shares of companies that were the subject of merger and acquisition transactions in which UBS was involved
  • UBS AG records detailing access by Ms Abdel-Malek to price sensitive information relating to each of these transactions when, as a compliance officer, she had no obvious need or reason to do so
  • timing of telephone & text contact at the time of Mr Choucair’s purchases
  • the use of the Pay-as-you-Go, “burner”, phones virtually for the entirety of their telephone contact
  • analysis of WhatsApp messages to support evidence of meetings
  • the swapping of SIM cards and handsets in an effort to avoid detection and disguise Ms Abdel-Malek’s communications with Mr Choucair whilst at her place of work
  • Ms Abdel-Malek’s decision to print out confidential documents prior to meeting Mr Choucair 

On occasions, it could be shown that Ms Abdel-Malek had inside information on screen whilst exchanging text messages with Mr Choucair. A document relating to one of the deals was found by FCA investigators during a search of Ms Abdel-Malek’s bedroom. 

Notes to Editors

  1. The Court of Appeal judgment is available on the BAILII website / R (Financial Conduct Authority) v Fabiana Abdel-Malek & Walid Choucair [2020] EWCA (Crim) 1730. 
  2. Costs of the appeal will be determined at a future date.      
  3. Two charged with insider dealing, FCA press release, June 2017.
  4. Two convicted of insider dealing, FCA press release, June 2019.
  5. On 7 August 2020, the Southwark Crown Court made a Confiscation Order against Ms Fabiana Abdel Malek in the sum of £34,194.53 with the consent of the FCA. That Order was satisfied in full on 10 September 2020.
  6. Confiscation proceedings against Mr Choucair will take place on 20 & 21 January 2021 to determine, under the Proceeds of Crime Act 2002, whether Mr Choucair has benefited from his offending, if so to determine the extent of that benefit and then make a suitable Confiscation Order against him.
  7. The appeal focused upon whether the convictions were rendered unsafe by any irregularity or unfairness due to events and disclosure arising before and at trial and/or arising because of events and disclosure occurring after the trial.

 

Channel website: https://www.fca.org.uk/

Original article link: https://www.fca.org.uk/news/press-releases/insider-dealing-convictions-upheld-court-appeal

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