Securities regulators on Thursday sued a well-connected Kuwaiti financier whose investment firm is partly owned by Citigroup Inc, saying he reaped millions in suspicious profits after “fraudulent” takeover reports sent shares of two US companies soaring. The civil lawsuit against Hazem Khalid Al-Braikan is sure to send shockwaves through the Middle East investment community. Al-Braikan, who declined to comment when reached by telephone, lists many achievements on his resume, including a US Medal of Honor for service in the first Gulf War - a claim the US Army said is bogus. Al-Braikan is chief executive of Al-Raya Investment Company, which is 10 percent owned by Citigroup. A familiar figure at high-level Middle Eastern financial functions, dressed in traditional Arab robe and speaking impeccable English, he is considered a respected member of the Kuwaiti money management world. The US Securities and Exchange Commission said in papers filed in Manhattan federal court that Al-Braikan and entities linked to him in Kuwait and Bahrain earned more than $5 million from well-timed trades in Harman International Industries Inc and Textron Inc. In Washington, a top SEC enforcement division official, Scott Friestad, said: “This is pretty brazen misconduct.” He said that an investigation began soon after learning about the takeover hoax on Monday at the same time as the markets and media outlets. “We have had a team of six or seven people working around the clock for the last couple of days to gather evidence.” The commission got an emergency court order on Thursday freezing the trading profits in various US accounts. “Defendants engaged in a deceptive scheme to profit by trading around the fraudulent offers to acquire Harman International and Textron,” the SEC complaint said. The defendants “profited from amassing large positions” in stocks and options in the two companies, the SEC papers said. Harman shares briefly soared on Monday after several media outlets reported that a private investment firm called Arabian Peninsula Group planned to buy it at almost double its market price.
