Tech entrepreneur named in FBI $41m insider trading probe

A celebrated Nigerian tech entrepreneur who featured in Forbes' 30 Under 30 list has been identified by the FBI as a co-conspirator in an insider trading scheme that generated $41 million in illegal profits, according to federal court filings. Izunna Okonkwo, co-founder of Pastel tech startup, allegedly traded stocks using confidential information leaked by a Citibank investment banker in a scheme that spanned multiple high-value corporate acquisitions over five years.

The allegations paint a picture of how insider information from major banking institutions was allegedly funneled through encrypted messaging apps to entrepreneurs who then executed lucrative trades ahead of public announcements, netting millions in illicit gains while simultaneously raising venture capital for their legitimate business ventures.

Background and Context

The case emerged from an investigation into insider trading at Citibank Investment Group, where Gyunho Justin Kim worked as an investment banker in San Francisco. Kim allegedly shared material non-public information (MNPI) about upcoming acquisitions with his friend Saad Shoukat, who then passed the tips to Okonkwo and other co-conspirators. The scheme operated between 2019 and 2024, targeting several major pharmaceutical and biotechnology acquisitions.

What makes this case particularly notable is the profile of one of its alleged beneficiaries. Okonkwo, a Stanford University graduate, had been celebrated in international business media as a rising African entrepreneur. His startup Pastel had raised over $6 million in seed funding and was featured in Forbes' prestigious 30 Under 30 list in 2023, highlighting him as an exemplary young business leader building technology solutions for African markets.

Key Figures and Entities

According to the FBI complaint filed in the U.S. District Court for New Jersey, the scheme involved several interconnected players. Gyunho Justin Kim, the Citibank investment banker, allegedly served as the primary source of insider information. Saad Shoukat, Kim's friend and intermediary, allegedly distributed the tips to traders including Okonkwo, who the FBI describes as a dual Nigerian-American citizen operating businesses from both Nigeria and Atlanta, Georgia.

Court documents reveal that Okonkwo and Shoukat had established a formal arrangement where Okonkwo provided access to his brokerage accounts in exchange for approximately 50% of trading profits. The FBI traced trading activities to various locations, including a London address where Okonkwo owned property and from which Shoukat allegedly conducted some illicit trades.

Legal and Financial Mechanisms

The alleged insider trading operation followed a consistent pattern across multiple deals. When Citibank was retained to advise on corporate acquisitions, Kim allegedly gained advance knowledge of the transactions. This information was then shared through encrypted messaging apps to Shoukat, who forwarded it to Okonkwo and other traders for pre-announcement stock purchases.

One significant example occurred in June 2020 when Kim learned of Gilead's planned $21 billion acquisition of Immunomedics. By July 2, Okonkwo, Shoukat, and other co-conspirators had begun accumulating Immunomedics shares. Following the public announcement in September, the group reportedly netted $4.9 million from this single transaction, with Okonkwo personally gaining $2.3 million and one of his relatives receiving $465,299.

Similar patterns emerged in other deals including Amgen's acquisition of Five Prime, GSK's buyout of Sierra, Pfizer's $5.4 billion acquisition of GBT, Biogen's takeover of Reata, and AbbVie's acquisition of Immonogen. Across these transactions, prosecutors allege that Okonkwo personally accumulated millions in illegal profits, including $3.5 million from the GBT deal—cashed out just days before his startup Pastel announced $5.5 million in seed funding.

International Implications and Policy Response

The case highlights ongoing challenges in regulating cross-border financial crimes and the vulnerabilities in investment banking information systems. The alleged use of encrypted messaging applications to facilitate insider trading demonstrates how technological tools can outpace regulatory frameworks designed to prevent market manipulation.

Furthermore, the international dimension—with operations spanning the United States, Nigeria, and the United Kingdom—underscores the complexity of prosecuting financial crimes in a globalized economy. The allegations suggest that illicit gains may have been moved across jurisdictions, potentially complicating recovery efforts for authorities.

Citibank, where Kim was employed, has responded to the allegations with a spokesperson stating: "Mr Kim is no longer with Citi and we understand that the conduct charged in the complaint pertains to activity at a prior employer of Mr. Kim and not Citi." This statement raises questions about oversight mechanisms within financial institutions and the flow of sensitive information between employers in the banking sector.

Sources

This report draws on FBI court filings submitted to the U.S. District Court for New Jersey, including the complaint sworn by FBI Special Agent Antony Belitti. Additional information comes from federal prosecutors' submissions to U.S. Magistrate Judge Michael A. Hammer. Public records regarding corporate acquisitions were reviewed, along with media reports about Pastel's funding announcements and Forbes' recognition of the company's founders. Attempts to obtain comment from Mr. Okonkwo and Pastel were unsuccessful, with a spokesperson for the company declining to comment on the allegations.