Today’s News
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Mohammed Zina, the 35-year-old former Goldman Sachs analyst, found himself in a state of despair at London’s Southwark Crown Court when the jury foreperson pronounced “guilty” nine times, marking the culmination of a nearly three-month trial on charges of insider dealing and fraud. Dressed sharply, Zina, whose promising banking career had taken a dark turn, began his 22-month sentence at HMP Wandsworth the following day, a Victorian-era men’s prison in London.
On February 16, Judge Tony Baumgartner lamented Zina’s choices, remarking, “I cannot help but feel pity for you, because you have thrown away what was undoubtedly a promising career in banking. Your reputation now is lost, and it is likely you will never be trusted to work in a position of such responsibility again.”
Dubbed Operation Kempston by the Financial Conduct Authority (FCA), the Zina case represents the first insider dealing conviction the FCA has secured since 2019. Therese Chambers, joint executive director of enforcement and market oversight at the FCA, underscores the significance of this outcome, stating, “There are many successful professionals across the City who are also in positions of trust, and this outcome should be a wake-up call to them that trust is there for a reason; it is not there to be abused.”
Goldman Sachs, where Zina was employed, expressed a “zero tolerance” stance toward such conduct, while Zina’s solicitor opted not to comment on the conviction.
After a relatively quiet period for enforcement during the Covid-19 pandemic, the FCA is now displaying a renewed commitment. Recent arrests in London for suspected insider dealing and ongoing prosecutions signal a proactive approach by the watchdog.
The FCA currently has 17 open insider dealing investigations, a notable increase from 14 in 2021 and 22 in 2022. However, the regulator’s track record on pursuing insider trading has been mixed. While successful convictions have been secured in the past decade, including high-profile cases involving UBS and BlackRock Investment Management, recent years have seen a decline in prosecutions, with some cases facing challenges and questions about witness credibility.
In the Zina case, the FCA’s efforts faced a setback as a defendant withdrew partway through the proceedings. Notably, Zina’s brother, Suhail Zina, a former Clifford Chance lawyer originally charged alongside him, was acquitted on all counts, highlighting the intricacies of the case.
Despite these challenges, the FCA remains steadfast in its commitment to addressing insider dealing. Chambers, in her first interview since assuming her role in April, emphasizes the importance of trust in financial professionals and the consequences of its betrayal. The FCA aims to send a clear message to the City of London about the severity of insider dealing.
As the FCA reviews and reflects on each case, including any lessons learned, the regulatory landscape for insider trading in the U.K. is witnessing renewed attention and determination.
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