Tomer Feingold and Dov Malnik were accused in a 15-count indictment of securities fraud, wire fraud, tender offer fraud, concealment of a money laundering scheme and conspiracy, Reuters reported Friday citing local authorities.
According to the report, officials have further stated that the defendants, who lived in Geneva, Switzerland, made millions of dollars of profit by trading on nonpublic information concerning mergers and potential transactions involving such companies as Ariad Pharmaceuticals Inc, Avanir Pharmaceuticals Inc and InterMune Inc.
This is while the US Securities and Exchange Commission (SEC) had originally filed related civil charges against Feingold and Malnik in March 2020, but their indictment remained sealed until Thursday.
While attorneys representing Feingold and Malnik in the SEC case did not immediately respond to press inquiries for comment, the office of US Attorney Audrey Strauss in New York’s Manhattan district stated that Malnik is in federal custody but Feingold is not.
According to SEC authorities, the two Israeli traders received tips from another trader in Switzerland, who had obtained them from investment bankers Benjamin Taylor and Darina Windsor, who had worked respectively at Moelis & Co and Centerview Partners LLC.
The other trader, identified in media reports as Marc Demane Debih from Geneva, pleaded guilty to 38 charges and cooperated in US prosecutors' insider trading case against Telemaque Lavidas, a pharmaceutical executive that was convicted in January 2010 and later sentenced to one year and one day in prison.
He had been among six people charged in four indictments in October 2019 over an insider trading plot that prosecutors said produced tens of millions of dollars in illegal profits, the report added.