FBI names Nigerian tech founder Izunna Okonkwo in $41m insider trading probe

The FBI has connected Nigerian entrepreneur and Pastel co-founder Izunna Okonkwo to a significant insider trading and money-laundering scheme that allegedly generated $41 million through the acquisition of several U.S. companies.

Court filings from the U.S. District Court for New Jersey indicate that Okonkwo, 30, was identified as a co-conspirator after investigators traced multiple trades and profit-sharing arrangements linked to a confidential deal

According to the filing, Okonkwo received significant insider information from Citibank investment banker Gyunho Justin Kim, relayed through their mutual acquaintance Saad Shoukat, a longtime friend of the Nigerian founder.

The FBI stated that the information pertained to upcoming mergers. The group would purchase stocks before any public announcements and then sell them after acquisition news caused the share prices to rise.

Investigators traced the logins for Okonkwo’s brokerage accounts to a residence he had in London. According to the complaint, this same address was used by Shoukat to conduct trades that generated millions of dollars from transactions involving companies such as Immunomedics, Five Prime, and Sierra Oncology, among others.

How the trading network allegedly operated

Federal investigators reported that Kim and Shoukat started their friendship in 2018 during internships at large companies. Kim later joined Citibank’s investment banking division in San Francisco.

In this role, he had access to confidential information shared with companies looking to buy other businesses.

Court documents say that Shoukat shared information about upcoming acquisitions with Okonkwo. Okonkwo then opened or allowed access to brokerage accounts to buy shares before public announcements.

A written agreement found by investigators showed that Okonkwo and Shoukat agreed to split the profits, with the founder receiving about half of the gains.

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The FBI reported that the group made millions from several major deals. In 2020, during the Immunomedics acquisition by Gilead, Okonkwo earned over $2.3 million, and a relative made more than $465,000. Other trades linked to buyouts with Amgen, GSK, Pfizer, and Biogen also brought in profits, including a $3.5 million gain for Okonkwo in 2022.

Other findings from the FBI

The FBI’s findings also highlight the cross-border nature of the investigation.
Key points raised in the filing include:

• Multiple trades traced to IP addresses linked to both Okonkwo and Shoukat
• Millions of dollars earned within short windows before public announcements
• Brokerage accounts opened or accessed shortly after Kim joined the deal teams
• Relatives of the suspects are benefiting from trades made with inside information