NEW YORK, May 4: A Pakistani junior investment banker at the Credit Suisse Group has been accused of insider trading in the $32 billion buyout of Texas utility TXU Corp, the world’s largest private equity deal, according to the Wall Street Journal.

US federal prosecutors and securities regulators also accused Hafiz Naseem, 37, of leaking word of eight other mergers.

The US attorney in Manhattan charged Hafiz Naseem with conspiracy and securities fraud for tipping a trader — a banker in Pakistan — who earned $7.5 million by trading in advance of the mergers, including $5 million on TXU alone.

A report in one business magazine said on Friday that one beneficiary of Hafiz Naseem’s tips was a Pakistani banker who fed the information to “certain high-profile financial executives” in Pakistan.

It did not identify the banker or the bank immediately.

Mr Naseem faces as many as 20 years in prison and $5 million in fines for each count of securities fraud. The charge of conspiracy to commit securities fraud carries a maximum sentence of 5 years and requires payment of $250,000 or twice his profit from the insider trading, a report in the magazine said.

The Wall Street Journal, which broke the news, said that the Securities and Exchange Commission filed parallel charges against Mr Naseem, by amending previously filed charges against multiple defendants in the Chicago federal court.

In a statement, Credit Suisse said the firm is “shocked and extremely disappointed that an employee would violate not only our trust, but the trust of our clients.”

The firm said it had brought the matter to regulators’ attention and has cooperated in the probe.

Besides TXU, the SEC said Mr Naseem provided tips before disclosure of acquisitions of eight other companies, including Trammell Crow Co, Northwestern Corp, and Jacuzzi Brands Inc, the Wall Street Journal said. The recipient racked up gains of about $2.4 million on those mergers, regulators charged.

They charged that Mr Naseem called the other trader at home and on his cellphone in advance of -- and frequently the same day or the day before – merger announcements.

The alleged recipient of Mr Naseem’s tips, prosecutors charged, bought both TXU stock and call options before the company’s buyout in February. Options give the holder the right to buy a stock at a specified price.

In one round of recent phone calls, regulators alleged, Mr Naseem placed several calls to the unnamed banker in the weeks before the Feb 26 announcement that TXU had agreed to be purchased by a group led by Kohlberg Kravis Roberts & Co and the TPG, the report said.

The trades were the largest of any involving TXU call options to draw public SEC scrutiny. “This investigation isn’t over,” said Stephen Korotash, chief trial counsel in the SEC’s Fort Worth, Texas, office. “We know there are others ... who think they've escaped detection. They’re wrong. We’re coming after them.”