(Bloomberg) — A former investment banker has been accused of helping organize a global insider trading scheme from the restaurant he owned in Paris.
Samy Fadi Khouadja was named, along with seven other men, in an indictment released Tuesday by federal prosecutors in Boston. The former Merrill Lynch banker has been accused of co-leading a group that raised tens of millions of dollars with inside information on more than a dozen trades.
Khouadja, 45, is not in custody and is considered a fugitive, the U.S. Department of Justice said in a statement announcing the charges. Dominique Inchauspé, Khouadja’s lawyer in France, declined to comment immediately before speaking to his client.
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Prosecutors said Khouadja and two other men led the scheme from 2016 to 2024, recruiting investment bankers and other corporate insiders who were paid to provide confidential information about public companies’ financial results and merger activity. The group’s members then allegedly traded based on this information through a global network.
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Members of the scheme used burner phones, coded language and encrypted messaging apps to hide their activities, according to the complaint. Payments for the information were made through cash transfers, shell companies and false invoices. Prosecutors say the defendants also leaked the information to journalists to profit after publication.
Khouadja worked at Merrill Lynch until 2014, before opening Hexagone, a restaurant in Paris that is now closed and where the scheme was allegedly planned.
The other alleged co-leaders of the scheme, Eamma Safi and Zhi Ge, were charged last year. Safi is in US custody and pleaded not guilty in February. Ge was arrested in Singapore, where he is currently fighting extradition to the US. He has not yet responded to the accusations.
In addition to the ringleaders, U.S. prosecutors also charged five people in France, Hong Kong and Singapore who allegedly agreed to trade in the confidential information in exchange for a percentage of the illicit profits. These people are not in custody and are considered fugitives, the Justice Department said.
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Ronald Cordas, a trader who allegedly helped Safi and Ge accumulate about $8 million by trading Tiffany & Co. shares before LVMH Moët Hennessy Louis Vuitton SE’s takeover bid was announced, has pleaded guilty and is cooperating with authorities.
Khouadja was charged in 2018 by French authorities as part of a separate insider trading investigation focused on suspicious gains made by a Geneva-based trader and a leak by a former consultant at Brunswick Group LLP. That investigation was still ongoing in March and no decision had been made about whether to hold a trial.
The case is US v. Safi, 24-cr-10200, U.S. District Court, District of Massachusetts.
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