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UK Supreme Court on Wednesday quashed extradition of Joseph El-Khouri, curbing the reach of US prosecutors

The UK Supreme Court has quashed the extradition to the US of a trader accused of insider trading in an unusual decision by British judges to curb the reach of American justice.

The UK’s highest court on Wednesday ruled in favour of Joseph El-Khouri, who US prosecutors claimed netted $2mn in profits from an insider trading conspiracy.

El-Khouri, a dual British and Lebanese national who lives in the UK, was charged in New York in 2019 and accused of obtaining inside information about prospective mergers and acquisitions of New York-listed companies.

The Manhattan US attorney’s office claimed he paid an intermediary for the information in cash and gifts including a yacht in Greece, a chalet in France and a hotel room in New York, and traded “contracts for difference” through a UK broker.

El-Khouri resisted extradition and accused the American authorities of over-reach, arguing that any links to the US were tenuous as the alleged misconduct took place in London.

A lower court had previously allowed his extradition after a hearing in 2021 and the UK government ordered that El-Khouri be sent to the US. An initial appeal by the trader at the High Court in London failed.

But a panel of five senior judges, led by the Supreme Court president Lord Robert Reed, on Wednesday unanimously ruled in his favour, blocking his removal on the grounds that the alleged criminality occurred outside the US.

The court noted that the UK’s Financial Conduct Authority conducted an investigation into El-Khouri between November 2016 and January 2018 but had concluded there was insufficient evidence to prosecute him.

El-Khouri’s lawyer, Richard Cannon of Stokoe Partnership Solicitors, said the ruling “brings to an end a five-and-a-half-year nightmare” that began with his arrest in 2019.

He added that the decision “represents an important check on over-reach” by the US authorities.

The US state department in London did not immediately respond to a request for comment.

Palantir’s exorbitant valuation mixes mystery and mayhem

US data analytics group could live up to the hype

If 2024 was the year Nvidia ate the world, 2025 belongs to Palantir. The defence-focused data-crunching company was the best-performing stock in the S&P 500 last year, overtaking the giant chipmaker after November’s US election. In the last week alone, its shares have risen by one-third, to give it a market capitalisation of nearly $260bn. The company’s mission: “making America more lethal”.

Explosive share price rises and bombastic rhetoric are easy fodder for meme stock-weary investors. Palantir certainly has many of the hallmarks. Chief executive Alex Karp describes his products as “powerful as fnck”. A valuation of 50 times next year’s forecast sales is twice the highest multiple ever afforded Tesla, Alphabet or Nvidia as listed companies.

Even so, Palantir could live up to the hype. Underneath the brimstone and vengeance, Palantir has worked out how to corral companies’ sprawling data troves to make them more efficient. To commercial customers, Palantir is something valuable if prosaic: a consultant that sells software, or what UBS analysts call a “McKinsey-meets-Databricks”.

Strip away the braggadocio, and it’s easier to have a sane conversation about Palantir’s worth. Analysts at Morningstar think it could one day capture 3 per cent of a total market worth $1.6tn, implying revenue of nearly $50bn. On a multiple of 10 times sales, in line with software giant Microsoft, Palantir should — eventually — be worth $500bn.

The question for investors is how long it takes to get there. Today, Palantir’s annual revenue is just $2.9bn. That’s the same size Salesforce, another software revolutionary, was in 2013. Marc Benioff’s company managed to sustain a growth rate above 20 per cent for almost a decade, something few companies have matched. 

Yet even at this rapid clip, Palantir would fall short. Indeed, using a 10 per cent cost of capital to discount future cash flows, it’s as if investors are saying Palantir can hit that revenue of $50bn in six years — a staggering 60 per cent annual growth rate.

One thing Palantir has now that Salesforce didn’t is AI. Companies like Microsoft, Amazon and OpenAI have sunk billions of dollars into models Palantir engineers can use to get creative. It doesn’t hurt either that Karp and co-founder Peter Thiel have established a revolving door of contacts between their company and western governments.

Those are powerful assets. Even armed with both of them, Karp needs to produce growth his predecessors couldn’t have imagined in order to justify that valuation. If he can keep up his knack for fuelling corporate greed and government fear, Palantir has a fighting chance.