A senior Wall Street banker from Credit Suisse was preparing to appear in a New York court last night charged with making more than $7 million (£3.5 million) from insider trading and giving illegal share tips to his friends.

Hafiz Naseem, 37, a former energy banker in the Swiss company’s New York offices, was arrested on Thursday night when he was charged with 25 counts of securities fraud and one count of conspiracy.

It is alleged that Mr Naseem revealed top secret details of big mergers and acquisitions that Credit Suisse was hired to advise on, including the record-breaking $32 billion buyout of TXU, the Dallas-based power company.

Mr Naseem is alleged to have fed information about forthcoming deals to contacts in Pakistan, who then made big bets on stock options and credit default swaps.

He faces as much 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 five years in prison and requires payment of either $250,000 or double the profit from the insider trading, whichever is the greater.

In a related civil complaint, the US Securities and Exchange Commission alleged that one beneficiary of Mr Naseem’s tips was a Pakistani banker who fed the information to “certain high-profile financial executives” in that country.

Mr Naseem’s court appearance marred what was supposed to be a celebration at Credit Suisse’s New York offices yesterday to mark Brady Dougan’s first day as chief executive.

Insider-trading cases have become more prevalent this year than at any time since the late 1980s.

In March, American prosecutors accused employees at Morgan Stanley, UBS and Bear Stearns of running an insider-trading ring that leaked details about takeovers and changes in analysts’ ratings.

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