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Dark dealings in the German financial center: The ex-journalist, who has had to stand trial in the Frankfurt district court since Wednesday, is said to have used the insider knowledge of a London friend and thus made double-digit million sums, according to the indictment

Photo: Daniel Roland / AFP

This case is probably one of the most spectacular cases of insider trading in Germany: Chief public prosecutor Markus Weimann and two of his colleagues read out their indictment in front of the Frankfurt regional court on Wednesday for a good hour and a half. They rattled off a lot of data, exorbitantly high sums of money and repeatedly the names of companies like

Covestro

and

Innogy, Osram and Bilfinger

. The defendant, a former journalist, is said to have made around 14 million euros in profits from shares in these companies.

Almost in passing, the prosecutors included some of the results of their investigations that were previously completely unknown and give the case a whole new dimension: Accordingly, the alleged tipster - a former banker at the London investment bank boutique Perella Weinberg - and the defendant had been friends for a long time. The former Perella partner is said to have provided his friend with confidential information about imminent takeovers and share buyback programs since 2006, which he had turned into money.

At the beginning of this time, the alleged informant worked at Deutsche Bank before moving to Perella in 2013. The investment bank boutique is considered one of the best addresses when it comes to advising companies on mergers and acquisitions.

The indictment focuses on offenses from 2017 to 2021. Everything else is considered time-barred. However, the public prosecutor could still try to confiscate part of the proceeds from before 2017.

Eye-catching stock deals over many years

According to the indictment, the now 48-year-old defendant gave his London friend a share in the proceeds - among other things, by giving him 150,000 euros to enable him to invest in a start-up.

The Federal Criminal Police Office, the Frankfurt public prosecutor's office and the financial regulator Bafin have been investigating this case since November 2021. At the beginning of 2023, they launched searches in Frankfurt and Munich, as well as in Austria and Great Britain. The trigger was a report from Bafin, which had previously identified some anomalies in the former journalist's stock deals with the help of transaction data from the stock exchange's trading surveillance office.

Ex-banker took his own life shortly after the raid

The former Perella banker killed himself two days after the raid on his employer and his private home.

A few years ago, Bafin, prosecutors and judges took a tougher approach when it comes to prosecuting insider trading crimes. Most recently, for example, the Frankfurt regional court sentenced a former Union Investment fund manager to a prison sentence of three and a half years and to repay more than 40 million euros. That's about eight times his profit and also includes the capital he used to cash in on his insider knowledge. However, due to formal errors, this procedure must be reopened.

Double-digit million sums invested

According to the public prosecutor's office, the former journalist, who has been standing before the Frankfurt district court since Wednesday, staked around 25 million euros and pocketed more than half of it as profit. He bought shares and warrants partly from his own portfolio and partly from the accounts of two companies where he was managing director. He has been in custody for a year, as has an acquaintance of his to whom he is said to have passed on insider information. The trial against him begins at the end of February.

The exact route by which the share price-relevant plans of the companies advised by Perella came to the defendant is still unclear. In their indictment, the prosecutors suggested that the ex-Perella man initially sent confidential documents from his professional email account to his private email account and that at some point they found their way to the defendant.

Perella does not want to comment on the case. Just this much: support the authorities in their investigations. Furthermore, neither the bank nor any of its current employees are the subject of the investigations and the legal proceedings. Deutsche Bank also declined to comment.

The defendant plans to make a statement next week. Observers expect detailed statements because, according to the court, the man wants to shorten the proceedings and spare some witnesses from testifying.