A former Credit Suisse investment banker convicted of insider trading was sentenced to 10 years in prison on Friday by a judge who said Wall Street professionals were failing to understand that it was a serious crime to cheat in the markets.
“It’s going on too much and people have to realize that if they do get caught, they’re going to pay,” US District Judge Robert Patterson said as he sentenced Hafiz Muhammad Zubair Naseem for feeding tips to a banker in Pakistan who made US$7.8 million in illegal profits.
“A lot of people aren’t caught and should be caught,” Patterson said as he also ordered Naseem to forfeit US$7.5 million.
Naseem was convicted in February of conspiracy to commit securities fraud and 28 counts of insider trading for providing the tips for up to two years while he worked in the Global Energy Group at the Manhattan offices of Credit Suisse Securities USA LLC.
Prosecutors had asked that Naseem, 37, be sentenced to between eight years and 10 years in prison. Judges usually levy sentences at the lower end of the guidelines.
Defense lawyers had argued that Naseem deserved leniency because he had never before committed a crime, because he had not received profits and because he had personal circumstances that included an ill mother and a young daughter with cerebral palsy.
Patterson, though, said he had become frustrated with what seemed like a cavalier attitude toward insider trading.
“It’s been prosecuted before and doesn’t seem to deter people very much,” he said.
He also said white-collar crimes seem to be carried out at all ages, while violent crimes seem to result mainly in the arrests of young people.
“When people get older, people lose their pizazz or whatever to do violent crimes,” he said. “But you’re just as greedy when you get old as when you’re younger.”
Michael Bachner, a lawyer for Naseem, vowed to appeal.
“The sentence is excessive, unnecessary to serve the interests of justice and we respectfully disagree,” he said.
Still a fugitive in the case is Ajaz Rahim, the head of investment banking at Faysal Bank in Pakistan, where he was accused of making the illegal trades in 2005 and 2006. Prosecutors say Rahim and Naseem once worked together in Pakistan and remained friends afterward.
Prosecutors said Naseem had received US$200,000 in wire transfers that appeared to be related to illegal profits, despite Naseem’s claims that the money came from his father.
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