Demane Debih pleaded guilty to criminal charges in October 2019 and agreed to help prosecutors investigate the racket. The lawsuit may indicate that he is finishing his cooperation, as he is scheduled to be sentenced on Dec. 10. Prosecutors must file their sentencing recommendation on Wednesday.
The SEC suit seeks a permanent injunction barring Demane Debih “from engaging in the transactions, acts, practices, and courses of business” alleged against him, as well as an unspecified civil penalty. The SEC routinely files parallel civil actions against people accused of criminal securities fraud.
Lawyers representing Demane Debih and the SEC didn’t immediately respond to emailed requests for comment on the suit.
Demane Debih’s assistance helped lead to the prosecution of at least half a dozen others linked to the scheme. The former Geneva-based trader served as the star witness in the January 2020 trial of Telemaque Lavidas, the son of a pharmaceutical company director. Lavidas was accused of leaking company secrets to a friend who passed them on to Demane Debih. He was convicted and sentenced to a year and a day in prison in July 2020.
Tuesday’s SEC lawsuit was filed a little more than a week after an Israeli man linked to the scheme, Dov Malnik, was sentenced to 30 months in prison. Malnik and business partner Tomer Feingold, both Israeli citizens living in Geneva, were charged in February with crimes including conspiracy and securities fraud in a previously sealed federal indictment that was made public in June. Malnik pleaded guilty in June, and Feingold remains at large.
Demane Debih passed tips to Feingold and Malnik, in exchange for millions of dollars in kickbacks, based on information he got from Benjamin Taylor, a former Moelis & Co. banker, and Darina Windsor, formerly of Centerview Partners, according to trial testimony and court fillings. Taylor and Windsor, a couple who shared a London apartment, were charged by the U.S. in October 2019 and have yet to respond to the allegations.
Cohen, the former Goldman banker, pleaded guilty in January 2020 to passing tips about deals involving Buffalo Wild Wings Inc. and Syngenta AG to Demane Debih and was sentenced to a year of home confinement.
The case is Securities and Exchange Commission v. Demane Debih, 21-cv-10138, U.S. District Court, Southern District of New York (Manhattan).