The Goldman Sachs insider trader who worked at a supermarket

By Upmanyu Trivedi

When Mohammed Zina landed himself a job at Goldman Sachs, he also chose to keep working weekend shifts at British supermarket Sainsbury’s.

It was an unusual side job for someone at the investment banking giant, but for Zina, it was a chance to stay grounded. Prosecutors saw him differently — an ambitious risk taker, who used privileged information at the bank to trade illegally.

Former Goldman Sachs analyst Mohammed Zina profited about £140,000 from the deals.
Former Goldman Sachs analyst Mohammed Zina profited about £140,000 from the deals.Credit: Bloomberg

On Thursday, the latter view won out, when a London jury found the 35-year-old former analyst in Goldman’s Conflict Resolution Group guilty of insider trading and fraud. He will be sentenced on Friday. He faces a prison sentence of as long as 10 years.

In the case brought by the Financial Conduct Authority, Zina was accused of illegally trading in shares of companies including ARM Holdings and Punch Taverns in 2016 and 2017. While prosecutors built their case on fraudulent loans, deals and profits, Zina’s defence focused on his character and his lack of knowledge that he was an insider.

Witnesses close to Zina painted a picture of a man with an unblemished reputation who made his friends and family proud with his career and behaviour. One cited his shifts at Sainsbury’s because he missed working alongside “ordinary people.” He never left his mother’s side when she battled a prolonged illness, the jury was told.

Inspired by Buffett

It was also around the same time that Zina turned to trading, inspired by Warren Buffett and using strategies he’d learned. It gave him something to focus on apart from his mother’s treatment, he told investigators.

“I’ll go into this like work, home, Mum, back to work, draining, tired, back home, Mum,” he said in a 2017 interview with the investigators. “So I just felt that I would just lose control and I didn’t want that to happen.”

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He denied wrongdoing and said he didn’t inform Goldman because he feared restrictions and a life without trading.

Zina’s job in the Conflict Resolution Group gave him access to information from across Goldman Sachs. But he didn’t know he was classified as an insider or that he was using inside information, his lawyer argued at trial.

A witness close to Zina said he stayed at Sainsbury’s because he missed working alongside “ordinary people.”
A witness close to Zina said he stayed at Sainsbury’s because he missed working alongside “ordinary people.”Credit: Sang Tan

“Mohammed Zina tried to cheat the market for his own personal gain by cynically trading on inside information,” said Steve Smart, the Financial Conduct Authority’s joint executive director of enforcement and market oversight.

Zina “betrayed the trust we placed in him and his misuse of client information was in direct contradiction of our values,” a Goldman Sachs spokesperson said. “We have zero tolerance for this conduct.”

From the pitch to Goldman Sachs

Trading wasn’t Zina’s first love. Growing up, he wanted to be a cricketer, but as a teenager, it didn’t work out.

He said he refocused on education and came across a career options prospectus on investment banking. The first name he read was Goldman Sachs.

“I became intrigued with the firm. I became intrigued with the industry,” he told investigators.

Good with numbers, he studied accountancy and finance at Durham University and then landed a job at Goldman Sachs.

Zina later moved to the Conflict Resolution Group, where he received confidential information, including about mergers and acquisition, on a regular basis. Using accounts in his brother’s and sister’s names, prosecutors said Zina traded shares in six companies using that information.

The FCA also charged his brother, Suhail, an ex-Clifford Chance lawyer, for helping him. Suhail was acquitted earlier this month.

There’s movement in Goldman Sachs’ top ranks in Australia.
There’s movement in Goldman Sachs’ top ranks in Australia.Credit: AP

In one instance, Zina bought shares in ARM an hour after receiving information related to Softbank Group’s plan to buy the chipmaker in 2016. He was also charged with illegal dealings in Punch, Alternative Networks, Shawbrook Group and US firms HSN and Snyder’s-Lance.

He sold when the shares jumped after public announcements about the deals, as much as 37 per cent in case of Punch, according to prosecutors. He profited about £140,000 ($270,000) in all.

Zina funded some of the investments with £95,000 borrowed from Tesco Bank. He was charged with three counts of fraud for getting the loan for home improvements and using it for trades.

“He knew enough about the stock market to know what is price sensitive,” prosecution lawyer Peter Carter said.

Aiming to move to the trading side, Zina was set to apply for an MBA when he got arrested in late 2017.

“I liked markets, I liked the way they moved,” Zina told investigators at the time. “I just wish that I was more patient.”

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Source: Thanks smh.com