(Bloomberg) -- A former Merrill Lynch banker has been charged as part of a French insider-trading investigation focusing on suspicious gains made by a Geneva-based trader and a leak from a former consultant at Brunswick Group LLP.

The charges against Samy Khouadja, filed in 2018 but disclosed in court earlier this month, related to a failed oil services deal. The case against Khouadja, who left Bank of America Corp.’s Merrill Lynch in February 2014, emerged at a French top court hearing where he and other defendants sought to challenge the way investigators gathered evidence.

Insider-trading probes have become a priority for prosecutors in the U.S. and Europe over the last few years. In a separate case last month, an ex-Goldman Sachs Group Inc. banker pleaded guilty in New York to passing on confidential tips and another trader was convicted in London last year of obtaining information on deals from a UBS Group AG compliance officer.

Court officials and lawyers didn’t specify what Khouadja is accused of doing, but the criminal case revolves around trades related to CGG SA amid a takeover approach by Technip SA in late 2014. The CGG probe has engulfed Geneva trader Lucien Selce and former Brunswick consultant Candice Baudet Depierre, who admitted she may have been “imprudent” in talking about a possible Technip bid during a dinner with unspecified people. Baudet Depierre had also worked at Merrill Lynch from 2008 to 2010, well before the events at issue.

Bank of America declined to comment other than to confirm that Khouadja had left the lender in February 2014, months before Technip’s interest in CGG was disclosed in a Bloomberg News story. Khouadja’s lawyer declined to comment.

Baudet Depierre and her lawyer didn’t respond to calls seeking comment. In a separate employment tribunal lawsuit over her dismissal at Brunswick, Baudet Depierre said that she hadn’t been charged in the CGG case. A lawyer for Selce, who has been charged with insider trading in the CGG probe, declined to comment.

Eight People Charged

At least eight people have been charged in the French insider trading probes that have focused primarily on the failed CGG-Technip deal and Air Liquide SA’s takeover of U.S. chemical producer Airgas Inc. Selce and Alexis Kuperfis, another Geneva trader who sued at the top court, have been charged on suspicions they made millions of euros by trading on inside information about the 2015 chemicals merger.

Appellate court proceedings have been important tools in connecting the dots in the ongoing insider trading probes as French court documents aren’t public and prosecutors rarely publicize charges. The hearing this month tackled a range of objections to different strands of prosecutors’ case.

In addition to the Khouadja case, a court official at the hearing said that a former BNP Paribas SA banker, Thierry Malka, had been charged with corruption in a case linked to Kuperfis. Both Malka and Kuperfis were challenging prosecutors’ tactics in an investigation related to trading in inflation-indexed French bonds.

The official at the Cour de Cassation said that investigators at France’s civil markets regulator, the Autorité des Marchés Financiers, opened the BNP probe after being informed about irregularities at the lender’s Asset-Liability Management desk. They determined that Malka, then a desk head, may have given Kuperfis information about BNP’s trading of inflation-indexed French bonds that he was able to turn into a profit.

The case was handed over to criminal authorities who also charged Kuperfis with active corruption for providing substantial benefits to Malka.

Julien Visconti, a lawyer for Malka, said BNP suffered no financial harm from the disputed transactions.

‘Lack of Damage’

“This lack of damage is clear from the investigations over the last four years, which show that transactions were carried out at the same price with other counterparts at the same time,” Visconti said in a statement. “Malka never performed any professional act in violation of his legal, contractual and work obligations.”

Representatives at BNP declined to comment as did a lawyer for Kuperfis and financial prosecutors at the Parquet National Financier.

In each challenge, defense lawyers argued that investigators illegally obtained phone records in breach of privacy rules. The Cour de Cassation is set to rule on the case on April 1.

To gather evidence in the Airgas and CGG probes, investigators asked telecommunications firms to provide phone records for mobile handsets the suspects might be using.

At the court hearing earlier this month, a lawyer for Selce said that privacy safeguards were short of the standards required by European Union case law. An independent body should have been in charge of granting authorization to access the phone records to prevent possible misuses but that wasn’t the case, said lawyer Dominique Foussard. “That’s a major flaw.”

Along with the phone records, French police conducted coordinated raids in January 2016 at the homes and offices of a then-Societe Generale SA banker and the Brunswick consultant.

The former SocGen banker is accused of having shared confidential details on the Airgas acquisition such as the target price with a middleman who then forwarded the information to Selce and other traders. In the CGG case, it’s unclear whether Baudet Depierre spoke with or knew Khouadja, but her job at Merrill Lynch was as an investment banking analyst focusing on M&A, according to her LinkedIn profile.

To contact the reporter on this story: Gaspard Sebag in Paris at gsebag@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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