MicroPakistan

Unfortunately, all this does is put a black mark on all the great work that Pakistani professionals (doctors, bankers, engineers etc.) have done abroad, especially in the US. Even today, post-9/11, many of them hold high posts and continue to do their nation proud. Our Prime Minister was also a NY banker for quite some time and many others hold high management posts at international banks.

From now on people will always remember Mr. Hafiz Naseem and would associate his actions to Pakistani bankers. Mind you, the guy has a pretty solid educational and professional background. He’s studied at Stern Business School and worked at American Express in Pakistan, and JPMorgan Chase and Credit Suisse in the US. All this goes to prove that good education and the most competitive and professional surroundings do not make a man honest. I must add that Mr Naseem has only been charged at the moment and every man is innocent until proven guilty. However, it seems as if the SEC has strong evidence against him.

Ironically, this does not at all represent the true nature of the work, commitment and honesty of our professionals abroad who continue to strive to make an honest living amid growing tensions between ‘Islam and the West’.

BBC reports:

An investment banker at Credit Suisse in New York has been charged with a number of offences in relation to insider trading.
Prosecutors allege that Hafiz Muhammad Zubair Naseem used his inside knowledge of upcoming takeovers to enrich himself and others by more than $7.5m (£3.8m).

Mr Naseem, 37, a Pakistani national, faces one count of conspiracy and 25 counts of securities fraud.

His lawyer has so far declined to comment.

Mr Naseem is said to have leaked information on nine takeovers or mergers.

‘Access to information’

Prosecutors allege that this took place between April 2006 and February 2007, and involved the following companies: Northwestern Corporation, Energy Partners, Veritas, Jacuzzi Brands, Trammell Crow, Hydril, Caremark, John H. Harland , and TXU.

Mr Naseem worked for the Global Energy Group at Credit Suisse Securities USA.

“Because many of the subject transactions were staffed by members of the Global Energy Group, Naseem had access to information about these transactions by virtue of his membership in the Global Energy Group,” said prosecutors.

Mr Naseem’s co-accused have yet to be named.

Bloomberg reports:

Pakistani Connection

Naseem, who’s also Pakistani, placed calls to the banker’s home and mobile phones in advance of deals involving Hydril Co., Trammell Crow Co., John H. Harland Co., Energy Partners Ltd., Veritas DGC Inc., Jacuzzi Brands Inc., Caremark Rx Inc. and NorthWestern Corp., as well as TXU, according to the SEC’s complaint.

After studying at a university in Lahore, Pakistan, and working there for five years at a banking unit of American Express Co., Naseem came to New York, according to securities- industry records. He attended New York University’s Stern School of Business from 2002 until 2004, then joined JPMorgan Chase & Co. He moved to Credit Suisse in March 2006.

At a bail hearing in Manhattan federal court today, U.S. Magistrate Judge Theodore Katz ordered Naseem held in jail because he poses “a risk of flight.”

Assistant U.S. Attorney Joshua Klein argued that Naseem, who faces more than 33 years in prison, may flee if released. Naseem recently priced a home in Pakistan and has “very strong ties there,” Klein said, noting the defendant earned about $260,000 in salary and bonus.

E-Mails, Phone Records

Naseem’s lawyer, Marc Mukasey, said the government’s request “reeks of xenophobia and some kind of racism.” His client, a father of two kids, returned this week from Pakistan after visiting his ailing mother, Mukasey said.

“The case is simply e-mails and phone records that corroborate the word of one conspirator,” Mukasey said. “The defendant is innocent.”

Klein declined to say whether the unnamed conspirator, whom he described as a high-ranking official at a Pakistani financial institution, is cooperating with prosecutors.

Dougan succeeds Oswald Gruebel as CEO today, becoming the first American to lead Switzerland’s second-biggest bank. For the past three years, as head of Credit Suisse’s investment bank, he oversaw the firm’s resurgence in mergers and acquisitions. Credit Suisse now ranks seventh in announced M&A, up from 11th in 2004, according to Bloomberg data.

Surveillance Challenge

“The firms have all expanded their M&A and private-equity businesses,” said James Cox, a securities law professor at Duke University in Durham, North Carolina. “I question whether that has outstripped the ability of investments banks’ surveillance and compliance departments to keep track of these deals and who has access to insider information.”

The government said Naseem started tipping the Pakistani banker “immediately upon obtaining employment at Credit Suisse in March 2006.” Often, he would divulge the confidential information the day before and sometimes even on the day of a takeover announcement, according to the SEC’s suit.

In one example, the banker put in an order for shares just 11 minutes after receiving Naseem’s call, prosecutors said.

The case stems from a probe of insider trading in TXU call options bought days before Kohlberg Kravis Roberts & Co. and Texas Pacific Group announced the leveraged buyout on Feb. 26.

Naseem, a resident of Rye Brook, New York, used his office phone at Credit Suisse to call the Pakistani banker on five days in February, leaking tips about the TXU buyout, according to the SEC’s suit, filed at U.S. District Court in Chicago.

TXU Dragnet

“Naseem seriously abused his position of trust with Credit Suisse and its clients by blatantly stealing market-moving information,” Rose Romero, director of the SEC’s Fort Worth, Texas, office, said in a statement. “Naseem schemed to line his own pockets, as well as the pockets of others, with unlawful profits to the detriment of innocent shareholders.”

The SEC in March sued Sunil and Seema Sehgal, a couple living in the U.K., for illegally reaping $271,600 in trades from advance information about the TXU buyout. That complaint was amended to include Naseem and Francisco Javier Garcia, who’s accused of buying 260 TXU call-option contracts less than a week before the bid became public, potentially reaping $150,000 in profits, the SEC said. An attorney for Garcia, who the SEC believes may live in Switzerland, couldn’t immediately be located.