NEW YORK, May 19: Several top Pakistani financial officials involved in making money thanks to insider information provided by Hafiz Naseem — a Pakistani working for the Credit Suisse bank who has been charged with insider trading here — are being investigated by US law-enforcement authorities, reliable sources have told Dawn.

According to the sources, an FBI team has landed in Pakistan to carry out the Pakistani leg of the criminal investigation, which allegedly involves bankers, stockbrokers, politicians and government officials.

Neil Donovan, an FBI official in New York, refused to confirm or deny reports of the massive scale of the investigation, saying it’s an ongoing inquiry and any comment at this stage could jeopardise the case. He referred all questions to the US attorney’s office.

Katherine S. Addleman, associate regional director of the Securities and Exchange Commission’s Fort Worth (Texas) Regional Office, told Dawn that Pakistani banker Aijaz Rahim had agreed to cooperate with the investigators and also consented to have his US account frozen.

He has an account at UBS Investment, which provides wealth management services to US clients. This includes both investment advisory and brokerage services. She also indicated that several Pakistani officials were cooperating in the investigation.

One Wall Street investment banker said the case had the makings of a huge scandal which could rock Pakistan’s financial sector in a big way and have profound repercussions. Those whose affairs were being investigated included an Arab-owned bank suspected of laundering money for Al Qaeda, a source said, adding that it had links with Pakistan’s top government officials, including some close advisers to the country’s rulers.

Hafiz Naseem was an employee of Credit Suisse and was an adviser on nine deals. He used to pass on information to Aijaz Rahim, who executed trades before the deals were announced.

Rahim, a former head of the Investment Banking Group at Faysal Bank, agreed to cooperate with the authorities once it was established that he was being investigated by the US Securities and Exchange Commission for having links with Naseem, the US authorities said.

The scam appeared in the press earlier this month when Naseem, 37, was arrested in New York and charged with 26 counts of conspiracy and securities fraud. He is accused of leaking details about nine deals, including the largest-ever $32 billion leveraged buyout of TXU, a Texas-based utility. It has also been revealed that Aijaz Rahim left his banking job in Karachi and moved to Canada earlier this year.

The arrival of the FBI financial crimes specialists in Pakistan has reportedly caused jitters in the top echelons of the banking and stock market sectors and even the government where quite a few people are having sleepless nights, fearing an FBI knock on their doors.