Assets frozen for al Hashemi

Khaled Mohammed Sharif al Sayed al Hashemi, the Al Ain resident accused of insider trading in the US, has agreed to a freeze of up to US$1.8 million (Dh6.6m) of his assets pending a resolution of his case. The freeze came as a "preliminary injunction" ordered on September 2 by Judge Harold Baer, the New York district court judge hearing Mr al Hashemi's case. Such injunctions prevent defendants from moving assets or other property beyond the jurisdiction of courts until their cases are resolved.

Mr al Hashemi was sued in July by the US Securities and Exchange Commission (SEC) over suspicious trading ahead of the acquisition of a Canadian petrochemicals company by an Abu Dhabi investor. He is accused of liquidating much of a stock portfolio in a US brokerage account and wiring an extra $100,000 to buy thousands of shares in Nova Chemicals before its acquisition by the International Petroleum Investment Company, based in Abu Dhabi, on February 23.

Nova's share price soared when the buyout was announced and Mr al Hashemi, who had never traded in the company's stock before February and had held a portfolio composed mainly of technology stocks, made a substantial profit, the SEC alleges. Statements from Mr al Hashemi's TD Ameritrade brokerage account show the value of his holdings surged to $660,800 from around $100,000. This prompted an SEC investigation that eventually led to the court case. Making trades based on knowledge of merger deals before they are announced is illegal in the US and can carry heavy fines.

Mr al Hashemi has yet to respond formally to the SEC's allegations, but he recently appointed a New York lawyer to defend him. In agreeing to the asset freeze, Mr al Hashemi did not admit or deny the SEC's allegations. He will be allowed to withdraw $25,000 a month for three months to cover "living expenses and satisfaction of outstanding obligations" while the freeze is in place. The judge ordered that the freeze apply only up to $1.845m of Mr al Hashemi's assets, without specifying how he arrived at that figure.

@Email:afitch@thenational.ae