Joseph Khoury Charged in Insider Trading Scheme

Joseph Khoury, a securities trader and frequent participant over the past decade on the World Poker Tour and European Poker Tour, has been charged as part of an international insider-trading ring that allegedly earned “tens of millions of dollars” in securities trades based on privileged information.

Khouri, known officially as Joseph El-Khouri, was arrested in the United Kingdom earlier this month and is in the process of being extradited back to the US to face charges brought by US Southern District of New York prosecutors. Khoury/El-Khouri, a native of Lebanon, also maintains residences in London, England and near Buffalo, New York.

According to an SDNY presser, “The defendants charged were members of a global insider trading ring. As part of the ring’s illicit conduct, insiders at multiple investment banks obtained material, nonpublic information (“MNPI”) about publicly traded companies and provided that information, sometimes through middlemen, to securities traders who paid for that information in order to place timely, profitable securities trades based on that MNPI.” Khoury was one of the securities traders involved in the long-running scheme, which authorities assert occurred between at least 2012 and 2016.

The ring’s alleged activities have a bit of the spy-novel touch: “The defendants charged were members of a global insider trading ring. As part of the ring’s illicit conduct, insiders at multiple investment banks obtained material, nonpublic information (“MNPI”) about publicly traded companies and provided that information, sometimes through middlemen, to securities traders who paid for that information in order to place timely, profitable securities trades based on that MNPI. Members of this ring took steps to evade detection by law enforcement, including by using unregistered “burner” cellphones and encrypted applications to communicate.”

Khoury’s indictment asserts that he received information from multiple investment bankers, including one unindicted co-conspirator with whom he was involved in a romantic relationship in England. Overall, Khoury is one of six people charged in the SDNY case. Khoury faces 16 separate counts in connection with the ring’s inside-trading activities, as follows:

  • Conspiracy to commit securities fraud and fraud in connection with a tender offer – one count
  • Conspiracy to commit wire fraud and securities fraud – one count
  • 15 U.S.C. §§ 78j(b) Securities fraud – six counts
  • Fraud in connection with a tender offer – two counts
  • Wire fraud – six counts
  • 18 U.S.C. § 1348 Securities fraud – one count

The filings list a large number of publicly-traded firms that were targeted by the group’s activities. Among other penalties, prosecutors will seek to have Khoury forfeit all proceeds earned from the illicit trades.

Deputy U.S. Attorney Audrey Strauss said: “The insider trading charges announced today lay bare a long-running international scheme stretching over the course of years, whose participants earned tens of millions of dollars in illicit profits from illegally trading on stolen inside information. Our Office, along with our law enforcement partners, will vigorously prosecute those who steal such information and the traders who profit off of it.”

FBI Assistant Director William F. Sweeney Jr. said: “As alleged, the indictments announced today detail very deliberate activity by both current and former investment bankers, securities traders, and even the son of a corporate board member to illegally profit from receiving or providing advanced knowledge of nonpublic information about publicly traded companies. When one has access to material, nonpublic information, they’re afforded significant knowledge that could give them a competitive edge in stock and options trading. Exploiting this knowledge is illegal, and the FBI will continue to investigate and prosecute those who cheat the system in this way.”

Joseph Khoury’s Hendon Mob page shows that he has logged 42 tournament cashes over the past decade, earning just under $600,000. His largest cash is a €125,000 sixth-place payday in the 2013 EPT Deauville (France) main event.

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