Three Bay Area men have been indicted by a federal grand jury in San Francisco for an alleged insider trading scheme of more than $5.3 million, the U.S. Department of Justice announced today. The 38-count indictment, unsealed today, charges Maher Fayez Kara, 37, of San Carlos, his brother Mounir Fayez Kara, 48, of Walnut Creek and Emile Youssef Jilwan, 54, of Pleasanton, with securities fraud and conspiracy, according to the Justice Department. Maher Fayez Kara, a former investment banker at Citigroup Global Markets Inc. in New York is accused of obtaining non-public information about confidential corporate acquisitions, financings and other transactions in New York, and then passing the information on to his brother. Mounir Fayez Kara — also known as Michael F. Kara — and Jilwan are charged with using that information to make illegal trades, between 2004 and 2007, in the securities of about 15 publicly traded companies, most in the biotechnology sector, according to the Justice Department. One of the victims was Citigroup and the company has cooperated with the U.S. Attorney’s Office and the FBI in the investigation, the Justice Department said. “Today’s economy has made the stock markets volatile at best; their integrity depends on professionals acting within the law,” said U.S. Attorney Joseph Russoniello in a statement today announcing the indictments. “When individuals violate their fiduciary duty, trade using illegally gained information and break the law, they will be prosecuted,” Russoniello said. Mounir Fayez Kara and Jilwan are also charged with conspiracy and obstruction for alleged “false and misleading statements” they made to the during its parallel investigation of the alleged scheme. All three men surrendered to the FBI this morning and made their first appearance in federal court in San Francisco today. They were released
from custody on $100,000 bond each, and are scheduled to return to court May 18.
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