Popsy, Pops, and the Rule of Law: SEC and DOJ Close in on Participants of a Global Insider Trading Ring

By: Janice Lopez

On October 21, 2019, the Department of Justice unsealed an indictment against Benjamin Taylor and Darina Windsor for their involvement in an international insider trading ring.[1]  Taylor, a resident of France, and Windsor, a resident of Thailand, were investment bankers working in London.[2]  They were also a couple, referring to each other as Popsy and Pops in emails containing confidential information.[3]  The Securities and Exchange Commission also filed a complaint against Windsor, Taylor, and Joseph El-Khouri—a securities trader—for their participation in the international insider trading ring.[4] Taylor and Windsor allegedly took nonpublic information regarding upcoming corporate transactions, such as mergers and acquisitions, and shared it with individuals, including El-Khouri, who then used the information to illegally trade securities in the stock market.[5] 

The SEC seeks the disgorgement of illicit profits obtained through insider trading, penalties, and injunctive relief.[6]  Between 2012 and 2018, Taylor and Windsor allegedly sold nonpublic information about more than twenty companies—information that they attained by working as investment bankers.[7]  Nonpublic information is information that is specific and likely to impact the cost of the relevant company’s stock.[8]  It must go beyond general rumor or even some prediction.[9]

Participants in this international insider trading scheme gained more than tens of millions of dollars in illegal profits from stock trading.[10] For example, Metals USA Holdings Corp., an American company, was going to be acquired by another company; prior to the announcement of the acquisition, Taylor divulged information about this transaction to a trader, and that trader consequently gained illicit profits of approximately $337,000.[11]  Similarly, Windsor provided a trader with information about an upcoming deal regarding the distribution of pharmaceuticals between Alliance Boots, Walgreens, and AmerisourceBergen, which resulted in the trader receiving approximately $347,000 in illicit profits.[12]  Windsor also revealed information regarding sixteen transactions that may affect the United States stock market—this information was circulated to multiple traders in Switzerland and London.[13]  

The SEC claims that Windsor, Taylor, and El-Khouri violated section 10(b) of the Securities Exchange Act and Rule 10b-5 of the General Rules and Regulations of the Securities Exchange Act.[14] Section 10(b) prohibits the violation of any rules and regulations set forth by the SEC for the protection of investors.[15] Rule 10b-5 makes it unlawful to commit fraud against an individual in relation to the purchase or sale of securities (or stock).[16]  The SEC alleges that in revealing nonpublic information to traders, Windsor and Taylor breached their fiduciary duties to their clients and consequently engaged in fraud against purchasers and sellers of stock.[17]

The SEC is also bringing a claim against the defendants under section 14(e) of the Securities Exchange Act and Rule 14e-3 of the General Rules and Regulations of the Securities Exchange Act.[18] Section 14(e) prohibits fraud in relation to tender offers.[19] Rule 14e-3 states that commencing a tender offer is a fraud in violation of Section 14(e) if a person with material information communicates nonpublic information.[20]  Windsor and Taylor allegedly violated these provisions because they had access to nonpublic information about upcoming company transactions, and communicated this information to traders prior to public announcements.[21]  El-Khouri was one trader that used this information by purchasing stocks that were likely to lead to a profit, thereby unfairly benefiting from insider knowledge.[22]  

In return for their tips, Taylor and Windsor received cash, watches, clothing, and travel, among other benefits.[23]  According to the SEC’s complaint, Windsor’s computer had a file titled Popsy, which contained a spreadsheet of her expected profits.[24]  Windsor and Taylor had a duty of confidentiality and a duty of loyalty to their corporate clients.  They breached this duty by using their access to information about upcoming corporate transactions to relay information to trading networks and to realize millions of dollars of illicit profits for participants of an international insider trading ring.  They put their own interests above that of their clients, thereby artificially influencing the stock market for these companies and giving an unfair advantage to insider trading participants. 

[1] Press Release, Dep’t of Just., U.S. Attorney’s Office, S.D.N.Y., Six Members of Global Insider Trading Ring Charged in Manhattan Federal Court (Oct. 22, 2019) https://www.justice.gov/usao-sdny/pr/six-members-global-insider-trading-ring-charged-manhattan-federal-court.

[2] Press Release, Dep’t of Just., U.S. Attorney’s Office, S.D.N.Y., Six Members of Global Insider Trading Ring Charged in Manhattan Federal Court (Oct. 22, 2019) https://www.justice.gov/usao-sdny/pr/six-members-global-insider-trading-ring-charged-manhattan-federal-court.

[3] See Rebecca Davis O’Brien, Investment Bankers Charged in Global Insider-Trading Scheme, Wall St. J.(Oct. 22, 2019), https://www.wsj.com/articles/investment-bankers-charged-in-global-insider-trading-scheme-11571763384 (“In an October 2012 email quoted in the indictment, Ms. Windsor wrote to Mr. Taylor with the subject line: “Once upon a time, there was a Pops searching for Truffles in the Forest…” Attached to the email was confidential information from Centerview related to a client, Onyx Pharmaceuticals Inc., which Ms. Windsor took from the bank’s computer system, prosecutors said.). 

[4] See Complaint at 1, Sec. & Exch. Comm’n v. Taylor(S.D.N.Y. 2019) (No. 1:19 Civ. 09744). 


[6]Sec. & Exch. Comm’n, SEC Charges Two Bankers and Trader in Serial International Insider Trading Scheme(Oct. 22, 2019) https://www.sec.gov/litigation/litreleases/2019/lr24650.htm.

[7]Bob Van Voris et al., London Investment Bankers Charged in Insider-Trading Ring,Bloomberg(Oct. 21, 2019) https://www.bloomberg.com/news/articles/2019-10-21/london-investment-bankers-charged-in-insider-trading-ring.

[8]United States v. Rajaratnam, 802 F. Supp. 2d 491, 498 (S.D.N.Y. 2011).


[10]Complaint, supra note 3, at 1.

[11]Complaint, supra note 3, at 10.

[12]Complaint, supra note 3, at 11-12.

[13]Franz Wild & Matt Robinson, Poker player, Goldman Sachs banker and London couple linked to international insider trading ring, Independent (Oct. 23, 2019) https://www.independent.co.uk/news/business/news/insider-trading-ring-poker-player-goldman-sachs-benjamin-taylor-darina-windsor-a9167606.html.

[14]Complaint, supra note 3, at 18.

[15]15 U.S.C.A. § 78j (West 2019). 

[16]17 C.F.R. § 240.10b-5 (2019).

[17]Complaint, supra note 3, at 19.

[18]Id. at 19-20.

[19]15 U.S.C.A. § 78n (West 2019).

[20]17 C.F.R. § 240.14e-3 (2019).

[21]Complaint,supranote 3, at 20.


[23]Theron Mohamed, Cryptic messages, cute nicknames, and millions in profits — a pair of bankers and lovers allegedly took part in a massive insider-trading ring, Bus. Insider(Oct. 22, 2019), https://markets.businessinsider.com/news/stocks/pair-bankers-lovers-engaged-insider-trading-2019-10-1028618000.

[24]Complaint, supra note 3, at 5.

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