Ex-Citigroup bankers drawn into criminal appeal over insider trading
Former UBS compliance officer and a day trader are seeking to overturn their criminal convictions
Two former Citigroup bankers have been dragged into a high-profile appeal brought by a former UBS compliance officer and a day trader who are seeking to overturn their criminal convictions.
Fabiana Abdel-Malek, who worked at UBS, and Walid Choucair, were both convicted of insider trading last year at Southwark Crown Court in the UK in a colourful case that detailed confidential tips being passed on untraceable burner phones and meetings at exclusive members’ clubs.
The jury heard that Ms Abdel-Malek gave confidential tips on deals UBS was working on to Mr Choucair, who would trade himself.
In his defence, Mr Choucair denied he had received inside information from Ms Abdel-Malek and instead testified that he had swapped market colour and trading ideas with an informal network of traders, including Alshair Fiyaz, the multi-millionaire owner of St Tropez polo club.
The trial heard claims that the Financial Conduct Authority had received information that a Citigroup employee had spoken to an intermediary of Mr Fiyaz. Mr Fiyaz denies any wrongdoing and has never been questioned by regulators or convicted of any offence.
On Thursday Julian Christopher QC, barrister for Ms Abdel-Malek, told the Criminal Court of Appeal that UBS was not the only bank involved in five share transactions that were at the heart of the prosecution case. “It became apparent that Citigroup was a common denominator,” he told the court.
He added that Ms Abdel-Malek was appealing against her conviction on grounds that the FCA’s investigation had been limited and some material had not been placed before the jury, which could have reached different conclusions and so the convictions were unsafe.
Richard Wormald QC, barrister for Mr Choucair, told the appeal that two former Citigroup bankers, David Johnson, who specialised in M&A between 2006 and 2013, and David Basra, a former head of debt financing in Europe and the Middle East, had been named by the FCA as the possible intermediary and source linked to Mr Fiyaz.
Mr Johnson also traded in two of the stocks that Mr Choucair was convicted of trading in, the court heard. The judges were told that Mr Choucair accepted that insider information had come from illegal sources although he did not realise that at the time.
Mr Wormald claimed there were links between the three men and Mr Johnson who lived in a “vast house” in London linked to Mr Fiyaz. He pointed to Mr Basra’s “seniority and intimate knowledge of M&A in the City” and added that Mr Basra and Mr Johnson had gone on skiing holidays in Verbier together.
The panel of three judges hearing the case raised questions about the relevance of these connections to the appeal. Mr Justice Davis told Mr Wormald the connections were “very dramatic prose pages but we are in the Court of Appeal. Where’s the logical connection?” He also told Mr Wormald: “You are in no position to say Mr Fiyaz probably was an insider trader.”
On Friday John McGuinness QC, acting for the FCA, argued that the duo’s convictions were safe and that additional material the defence lawyers claimed should have been disclosed by the regulator was “peripheral”. He said that during the trial the defence teams had added agreed facts about the Citigroup connection but “the jury were still sure” enough to convict the pair.
Citigroup said in a statement: “We have co-operated with the FCA in relation to its enquiries into this matter.”
A statement issued on behalf of Mr Johnson said: “Mr Johnson has never been involved in any insider trading of any nature and he was not the alleged intermediary. Further, he has never been contacted by the FCA (in respect of any matter) and it is reasonable to assume therefore that had they had any concerns they would have sought to make contact with him by now.”
Mr Basra could not be reached for comment.
GERMAN FINANCE MINISTER SCHOLZ SAYS WE WILL INVITE NEW US ADMINISTRATION TO SUPPORT FRANCO-GERMAN PROPOSAL ON GLOBAL MINIMUM CORPORATE TAX RATE
DISCLAIMER This information represents neither an offer to buy or sell any security nor, because it does not take into account the differing needs of individual clients, investment advice. Those seeking investment advice specific to their financial profiles and goals should contact their Oscar Gruss & Son Incorporated sales representative. Oscar Gruss & Son Incorporated believes this information to be reliable, but no representation is made as to accuracy or completeness. This information does not analyze every material fact concerning a company, industry, or security. Oscar Gruss & Son Incorporated assumes that this information will be read in conjunction with other publicly available data. Matters discussed here are subject to change without notice. There can be no assurance that reliance on the information contained here will produce profitable results. A security denominated in a foreign currency is subject to fluctuations in currency exchange rates, which may have an adverse effect on the value of the security upon the conversion into local currency of dividends, interest, or sales proceeds. The value of securities and depositary receipts of foreign issuers that are denominated in United States dollars are also influenced by fluctuations in currency exchange rates. © 2020 Oscar Gruss & Son Incorporated. All rights reserved.Today:
CLII/U First Day for Separate Trading of Class A Common Stock and Warrants (under CLII and CLII WS symbols on the NYSE)
FGNA/U First Day for Separate Trading of Class A Common Stock and Warrants (under FGNA and FGNA WS symbols on the NYSE)
LACQ Shareholder Redemption Deadline 5:00pm ET
LGC/Onyx Enterprises Expected Closing Date (after close, per NYSE)
LOAC/DDDD LN LOAC S/H Vote Date (to vote on an extension of the deadline to consummate an initial business combination from 11/30/20 to 5/29/21) 11:00am ET
MFAC/BankMobile MFAC Shareholder Redemption Deadline (in connection with special meeting to vote on an extension of the deadline to consummate an in initial business combination from 11/30/20 to 3/1/21) 5:00pm ET
VSPRU First Day for Separate Trading of Class A Common Stock and Warrants (under the VSPR and VSPRW symbols on Nasdaq)
VYGG/U VYGG/U: First Day of Separate Trading for Ordinary Shares and Warrants (under the VYGG and VYGG WS symbols on the NYSE)
LGVW/Butterfly Network to merge
Management Presentation
A presentation made by the management teams of both Butterfly and Longview regarding the transaction will be available on the websites of Butterfly at www.butterflynetwork.com and Longview at www.longviewacquisition.com . Longview will also file the presentation with the SEC in a Current Report on Form 8-K, which will be accessible at www.sec.gov .
Announce Final Results of tender offer
S-1/A#1 filed, exhibits only
S-1/A#2 filed, no symbol (redline attached)
Downsize IPO to $250M from $400M, amend units structure from 1 share and 1/3rd of a warrant to ½ of a warrant, update financial numbers for 9/30/20, update risk factors (p.36-50)
S-1/A#2 Filed, minor changes
DEF14A 11/6 record, 11/30 meeting to extend business combination deadline (12/1/20) an additional 3 months with ability for further extend subject to board approval
11/25/20 Redemption deadline.
For illustrative purposes, based on funds in the trust account of approximately $63,155,868 on November 17, 2020, the estimated per share conversion price would have been approximately $10.91.
Since the completion of our IPO in June 2018, our representatives have engaged in extensive discussions with investment bankers and business owners with respect to potential business combination opportunities, and continue to do so. However, as a result of ongoing discussions regarding such opportunities, as well as delays resulting from the COVID-19 pandemic, our board of directors has determined that it is in the best interests of our stockholders to extend the Current Termination Date to the Extended Termination Date and provide that the date for cessation of operations of the Company if the Company has not completed a business combination would similarly be extended to the Extended Termination Date (the “Extension”).
S-4/A#1 filed, still no meeting date or redemption deadline, edit cash consideration definition, update numbers for 9/30/20
$100M IPO Priced.
The units will trade on the New York Stock Exchange under the ticker symbol “KWAC.U” beginning November 20, 2020. Kingswood Acquisition Corp. expects the initial public offering to close on November 24, 2020, subject to customary closing conditions. Once the securities comprising the units begin separate trading, the Class A common stock and the warrants are expected to be traded on the NYSE under the symbols “KWAC” and “KWAC WS,” respectively.
$200M IPO Priced
The units will be listed on the Nasdaq Stock Market and trade under the ticker symbol “ARBGU” beginning Friday, November 20, 2020.
Each unit consists of one share of the Company’s Class A common stock and one-third of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of the Company’s Class A common stock at a price of $11.50 per share. Once the securities comprising the units begin separate trading, the Class A common stock and warrants are expected to be listed on the Nasdaq Stock Market under the symbols “ARBG” and “ARBGW,” respectively. The initial public offering is expected to close on Tuesday, November 24, 2020, subject to customary closing conditions.
$200M IPO Priced
The units will be listed on the New York Stock Exchange (“NYSE”) and will begin trading on Friday, November 20, 2020, under the ticker symbol “CAS.U.” Each unit consists of one share of the Company’s Class A common stock and one-half of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share. Only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Once the securities comprising the units begin separate trading, shares of the Class A common stock and warrants are expected to be listed on NYSE under the symbols “CAS” and “CAS.WS,” respectively.
$200M IPO Priced
The units will be listed on the New York Stock Exchange (the "NYSE") and trade under the ticker symbol "OCA.U" beginning on November 20, 2020. Each unit consists of one share of Class A common stock and one-half of one redeemable warrant, with each whole warrant exercisable to purchase one share of Class A common stock at a price of $11.50 per share. After the securities comprising the units begin separate trading, the shares of Class A common stock and warrants are expected to be listed on the NYSE under the symbols "OCA" and "OCA WS," respectively.
424B4 Filed
Altimeter Growth Corp. (the "Company") announced today that commencing November 23, 2020, holders of the units sold in the Company's initial public offering of 45,000,000 units may elect to separately trade the shares of Class A ordinary shares and redeemable warrants included in the units. Those units not separated will continue to trade on the Nasdaq Capital Market (the "Nasdaq") under the symbol "AGCUU." Class A ordinary shares and warrants that are separated will trade on the Nasdaq under the symbols "AGC" and "AGCWW," respectively. No fractional warrants will be issued upon separation of the units and only whole warrants will trade.
Nuvve Corporation and Lion Electric Announce Vehicle-to-Grid (V2G) collaboration
From Yesterday:
Perella Weinberg Partners Said to Seek Listing Via Blank-Check Firm (Bloomberg)
Reports Closing of IPO, Sale of Private Placement Warrants
On November 19, 2020, Zanite Acquisition Corp. (the “Company”) consummated its initial public offering (“IPO”) of 23,000,000 units (the “Units”), including the issuance of 3,000,000 Units as a result of the underwriters’ exercise of their over-allotment option in full.
Simultaneously with the closing of the IPO, pursuant to the Private Placement Warrants Purchase Agreement, the Company completed the private sale of an aggregate of 9,650,000 warrants (the “Private Placement Warrants”) to the Sponsor at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds to the Company of $9,650,000.
424B4 Filed
S-1/A#1 Filed
No material changes (updates numbers to 9/30 and other minor changes)
424B4 Filed
Form 10-Q Filed
Form 10-Q Filed
S-1 Filed
For IPO of 10.0M units; each unit will consist of one share of Class A common stock and one-half of one warrant; to be listed under DDMXU, DDMX and DDMXW symbols on Nasdaq (no dates)
We may pursue a business combination opportunity in any business or industry we choose. To date, our efforts have been limited to organizational activities as well as activities related to this offering. None of our officers, directors, promoters and other affiliates has engaged in any substantive discussions on our behalf with representatives of other companies regarding the possibility of a potential business combination with us.
The members of our management team have extensive experience with cross-border transactions and consummating business combinations, including one with a special purpose acquisition company like our company. We will seek to capitalize on the operating and investing experience and network of relationships of Dr. Martin M. Werner, our Chairman and Chief Executive Officer, Jorge Combe, our Chief Operating Officer and one of our directors, and our other officers and directors in consummating an initial business combination. During their careers, Dr. Werner and Mr. Combe have been involved in merger and acquisition transactions and bond offerings valued, in the aggregate, at more than $90 billion in the retail and consumer, financial services, infrastructure, energy, leisure and real estate industries. Dr. Werner and Mr. Combe have over 50 years of combined experience in the financial services industry, most notably as a Partner and Managing Director, respectively, of Goldman Sachs.
In June 2018, Dr. Werner and Mr. Combe founded DD3 Acquisition Corp., or DD3 Acquisition I, a blank check company formed for substantially similar purposes as our company. DD3 Acquisition I completed its initial public offering in October 2018. In March 2020, DD3 Acquisition I completed its initial business combination with Betterware de México, S.A.B de C.V. (NASDAQ: BWMX), or Betterware, a consumer direct selling company focused on the home organization segment. Betterware is an asset light, high growth business that sells its branded product through a distribution network of more than 1,200,000 sales persons. Over the last five years, Betterware has averaged an annual revenue and EBITDA growth of more than 40% and 50%, respectively.
We believe that the transaction with Betterware is an example of our management team’s expertise in identifying and consummating attractive business combinations and ability to generate favorable results for our investors. Since the closing of the initial business combination, Betterware’s price per share has increased more than 200%, and investors in DD3 Acquisition I’s initial public offering who continued to hold ordinary shares and warrants through November 18, 2020, achieved a total return in excess of 300%.
Following the merger of DD3 Acquisition I with Betterware, Dr. Werner joined the board of the combined company and has been advising Betterware on corporate strategy and governance, capital markets and business development opportunities, and also assisting with investor relations efforts.
During their time at Goldman Sachs, Dr. Werner and Mr. Combe led the Mexico and Latin-American Investment Banking Division in expanding its client network in various industries and embracing a leadership position in the region by executing mergers and acquisitions transactions, initial public offerings, capital raising, debt raising, leveraged buyouts and private equity transactions.
S-1/A#1 Filed
Changes titles of co-founders (Arun Sarin was CEO, now is Chairman, with Ori Sasson, who was President, now CEO and CFO)
S-1/A#1 Filed
Updates risk factors
Treasury wants to end pandemic loan programs — and the Fed isn’t happy
The Trump administration plans to pull the plug on five loan programs that supported the economy during the coronavirus crisis — prompting a rare objection from the Federal Reserve.
Treasury Secretary Steven Mnuchin said his department won’t renew the emergency programs — which shored up the corporate bond market, municipal governments and struggling Main Street businesses — after they expire on Dec. 31.
Mnuchin also asked the Fed on Thursday to return all unused funding for the programs that came from the CARES Act stimulus bill, which he said would allow Congress to “re-appropriate” $455 billion for other coronavirus aid efforts.
But the usually staid central bank issued a blunt statement opposing the move, saying it “would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”
Fed Chairman Jerome Powell and other bank honchos have argued in recent months that the economy needs more government support to fuel the fragile recovery from the massive economic downturn the pandemic has caused.
Powell said Tuesday that it was not yet time to wind down the emergency lending programs amid a nationwide surge in coronavirus infections, adding that the economy had “a long way to go” before it’s fully healed.
But Mnuchin argued that the facilities “have clearly achieved their objective” of reducing pressure on banks and improving access to credit. He said the Fed could seek approval to restart the programs if they’re needed again and expressed support for extending other programs that weren’t funded by the CARES Act.
The secretary also noted that “use of these facilities has been limited” — the municipal lending program has made just one loan and the Main Street lending initiative has loaned just about $4 billion to roughly 400 companies.~
Sen. Pat Toomey, a Pennsylvania Republican who sits on the Senate Finance Committee, backed Mnuchin’s move, saying the programs were only meant as a short-term backstop.
“Congress’ intent was clear: These facilities were to be temporary, to provide liquidity and to cease operations by the end of 2020,” Toomey said in a statement.
But Rep. James Clyburn (D-South Carolina) said there was “no justification” for Mnuchin’s decision to cut off the programs on his way out of the White House.
“These programs are part of a comprehensive set of tools Congress gave the Federal Reserve to combat the pandemic-related economic crisis, and ending them in the midst of the crisis would undermine the economic recovery,” said Clyburn, who chairs the House’s Select Subcommittee on the Coronavirus Crisis.
When diversity and ideology collide
President-elect Joe Biden has made assembling a diverse team a priority. He also faces pressure from the progressive wing of his party to limit corporate influence on hires for his administration, avoiding candidates from Wall Street or company boardrooms. But narrowing the candidate pool that way won’t help create a more representative administration, some suggest.
“Big Business is here to help,” said Ron Parker, the chief executive of the National Association of Securities Professionals. He told DealBook that women and people of color in business have “a unique experience that lends itself to being heard.” This week, the N.A.S.P. and seven other trade groups sent a letter to Mr. Biden urging him to prioritize diversity in top economic policy positions and to “reject demands for a blanket exclusion on potential appointees with experience in the corporate sector or financial services field specifically.”
Roger Ferguson, one of the most prominent Black executives in the financial industry, just announced his retirement as the C.E.O. of TIAA. He is on the short list for Treasury secretary (more on that below), and gets Mr. Parker’s support.
Research on racial diversity among financial regulators makes for uncomfortable reading. Of the 327 federal financial agency posts requiring congressional confirmation over the years, only 10 appointees have been Black, according to a recent report by Chris Brummer at the Institute of International Economic Law at Georgetown. When DealBook spoke to Professor Brummer last month, he said those findings had received a lot of attention, perhaps because no one ever quantified the lack of diversity in this way before. He has since been named a member of Mr. Biden’s Treasury Department advisory review team.
The obstacle to more diverse hiring “is not the skill set, it’s the relationships,” said Petal Walker of the law firm WilmerHale, formerly a chief counsel at the Commodities Futures Trading Commission. People tend to hire those with whom they golf or grab a drink, she told DealBook, so it will take “intentional action” to break down established cliques.
The calls to reject corporate candidates ignore U.S. history, said Paul Thornell, a former Senate and White House staff member, of the lobbying firm Mehlman Castagnetti. The generational wealth gap created by a long history of discrimination leaves fewer people of color able to afford taking jobs in government or nonprofits. “Groups from the far left throw out edicts,” he told DealBook, “but these don’t reflect the realities of the American experience or inequality, the racial wealth gap, and may prove counterproductive to diversify the administration and to implement policies that work for all Americans.”
Gapping down
In reaction to earnings/guidance:
- GSX -15.9%, POST -5.9%, BEST -3.7% (also announces new strategic plan to focus on core businesses), WDAY -3.4%, EAR -2.1%, .
Other news:
- NNDM -27.6% (prices offering of 25 mln ADS's at $4.00 per ADS)
- AVRO -6.9% (prices offering of 15 mln shares of common stock at $15.00 per share)
- STOK -1.3% (prices offering of 2.5 mln shares of common stock at $39.00 per share)
- GILD -1% (WHO recommends against the use of remdesivir in COVID-19 patients)
Analyst comments:
- PCAR -2.4% (downgraded to Underperform from Buy at BofA Securities)
- HOLX -2.2% (downgraded to Hold from Buy at Needham)
- BK -1.3% (downgraded to Underperform from Neutral at BofA Securities)
- SHAK -1% (downgraded to Neutral from Outperform at Wedbush)
- GOOS -0.8% (downgraded to Hold from Buy at HSBC Securities)
- NUE -0.6% (downgraded to Sector Weight from Overweight at KeyBanc Capital Markets)
- GWW -0.5% (downgraded to Mkt Perform from Outperform at William Blair)