Investment bank Perella Weinberg suspended a London-based banker after its European headquarters were raided this week as part of an insider trading investigation by German police and regulators, according to people familiar with the matter.
German law enforcement suspected that the Perella Weinberg employee shared sensitive information about looming mergers and acquisitions deals with four German citizens who traded on the information, officials said in a statement on Thursday.
The insider trading, which can be punished with up to five years in jail, is alleged to have occurred between 2017 and 2021. Prosecutors say the deals could have generated a double-digit million-euro profit.
A 47-year-old German citizen who has been accused of trading on the insider information was arrested in Munich earlier this month and is in police custody. Three other individuals, including the 82-year-old father of the arrested trader, are also under investigation.
The 47-year-old, who the Financial Times is not naming for legal reasons, is a former journalist who became an executive at German publishers before starting his own communications advisory business, people familiar with the matter told the Financial Times.
Perella Weinberg said: “The firm is assisting in an investigation by German law enforcement authorities. The firm is not the subject of the investigation, and there is no suggestion of wrongdoing on the part of the firm.”
The suspension was first reported by Manager magazine, a monthly business publication.
Over the past few years, Perella Weinberg, led by former Morgan Stanley banker Dietrich Becker, has risen to become one of the leading M&A advisers in Germany.
It has been at the centre of most large-scale transactions in Germany, including the €29bn takeover of Deutsche Wohnen by Vonovia in 2021, the €4.5bn takeover of Osram in 2019 and the €59bn asset swap between RWE and Eon in 2018.
German law enforcement officials, including the Federal Criminal Police Office, have been investigating the alleged insider trading since November 2021 after regulator BaFin flagged suspicious trading patterns.
The probe, which involved raids at eight premises in Germany, the UK and Austria, was disclosed on Thursday without naming Perella Weinberg.
BaFin and Frankfurt prosecutors declined to comment on the identity of the bank.
The case is the third big insider trading scandal involving a large financial institution in Germany over the past two years.
In September 2021, a former senior funds manager at Union Investment was sentenced to three-and-a-half years in jail and ordered by a Frankfurt court to repay almost six times the €8mn in profits he made.
Last year, a former Lazard investment banker who shared confidential information with a trader received a suspended jail term of one-and-a-half years. The trader was sentenced to three years and eight months in jail by a Frankfurt court.
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