Dov Malnik, an Israeli securities trader and finance professional, was sentenced to 30 months in federal prison for his role in a sprawling international insider trading scheme that exploited confidential information stolen from a global investment bank. Malnik, extradited from Switzerland, pled guilty on June 25, 2021, to trading on material, nonpublic information shared with him in exchange for a cut of the profits. The sentence was handed down November 19, 2021, by U.S. District Judge Victor Marrero in Manhattan.
According to court filings and statements made during proceedings, Malnik and his business partner, Tomer Feingold—also an Israeli citizen—ran a network of offshore shell companies and investment funds used to execute rapid, high-volume trades based on stolen corporate secrets. From at least 2013 through 2017, Malnik received inside information from a Switzerland-based trader known as CC-1, who pulled the data from insiders at major financial firms and publicly traded companies. Malnik knew the information was illicitly obtained, yet used it to generate millions in illegal profits.
The conspiracy was built on layers of deception. Malnik and his co-conspirators communicated through encrypted messaging apps and used multiple unregistered “burner” cellphones to avoid detection. He laundered trading activity through offshore entities, including a British Virgin Islands company based in Geneva, Switzerland, which he incorporated in 2011. These shell firms placed coordinated trades in stocks targeted by MNPI—often on the same day and in lockstep—amplifying gains while masking the source of the intelligence.
Profit-sharing with CC-1 was disguised through fraud. After Malnik’s bank began questioning wire transfers to Switzerland, he, Feingold, and CC-1 fabricated a cover: fake consulting invoices issued by CC-1 to Malnik’s offshore firms. The shell companies then processed the payments as legitimate business expenses, funneling illicit proceeds under the guise of professional services—a move designed to fool financial watchdogs and compliance officers.
U.S. Attorney Damian Williams of the Southern District of New York emphasized the reach of American enforcement: “This prosecution 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.” The case underscores the DOJ’s relentless pursuit of cross-border financial crime, even when actors operate beyond U.S. borders.
The Malnik conviction is part of a broader takedown of the global insider trading ring. Others already convicted include investment banker Bryan Cohen, who pled guilty January 7, 2020, to leaking client acquisition details, and pharmaceutical executive Telemaque Lavidas, who was also found guilty of participating in the scheme. Investigators continue to track additional participants as part of an ongoing probe into the international abuse of market-sensitive data.
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Key Facts
- State: New York
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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