Dov Malnik, a past swimmer from the Israeli national team, was sentenced to 30 months in prison in the US for his role in an insider trading scheme that netted millions of dollars.
Malnik, 43, who after his swimming career became a securities trader and finance professional, was also ordered to pay a fine of $50,000 and forfeiture of $1,594,779, the US Justice Department said in a statement Monday.
As a swimmer, he had been on the Israeli squad at the 2001 World Swimming Championships in Japan and then again at the contest in Spain in 2003. He is also a former Israeli record holder for the 200m breaststroke.
The sentencing came after Malnik pleaded guilty on June 25 to trading based on confidential information stolen by an insider at a global investment bank.
According to court papers cited in the statement, Malnik and his business partner Tom Feingold, also an Israeli citizen and a swimmer, were securities traders managing various companies and investment funds.
“From at least 2013 through 2017, Malnik participated in a large-scale, international insider trading ring,” the statement said. “Through the scheme, Malnik received material, nonpublic information concerning acquisitions and potential acquisitions of publicly traded companies from a securities trader who resided in Switzerland.”
Malnik knew that the information, obtained by a third individual identified in the statement only as CC-1, came “directly and indirectly from individuals who were insiders at publicly traded companies and investment banks,” it said.
“Malnik used that information to place timely, profitable securities trades resulting in millions of dollars of profits,” the statement said.
Payments to CC-1 were initially made as direct money transfers to a Swiss bank account, and then later, as a deception, in the form of payments for “fake invoices” for consulting services issued by CC-1.
The statement noted that the investigation has led to the conviction of other individuals who were involved in the scheme, including investment banker Bryan Cohen, who pleaded guilty on January 7, 2020.
Damian Williams, United States attorney for the Southern District of New York, said in the statement that prosecution of Malnik “shows that we will vigorously protect the integrity of our nation’s capital markets by holding insider traders accountable for their use of inside information, regardless of where in the world the inside information is stolen and where tips are illegally passed.”
Malnik was arrested in Switzerland on October 7, 2020, and later extradited to the US, the Ynet news site reported in June.
Feingold, who in the early 2000s competed as a swimmer representing Texas College in the US College Championships, is said to be living in Italy, according to the report. Though Feingold has also been charged in the US with fraud and insider information charges, he has not yet been extradited.
According to Ynet, citing the US Securities and Exchange Commission, Malnik and Feingold were named in trial testimony of Marc Demane Debih, a former Geneva investor who confessed to earning over $70 million through insider trading. Debih had admitted passing information on to Malnik and Feingold.