Defense--Ex-banker Naseem didn't leak inside info

By Emily Chasan

NEW YORK, Jan 31 (Reuters) - A lawyer for a former Credit Suisse Group (CSGN.VX: Quote, Profile, Research) investment banker accused of insider trading argued on Thursday that the government has failed to prove he did anything but make phone calls to a friend in Pakistan.

U.S. prosecutors have accused Hafiz Naseem, 37, of participating in a $7.5 million scheme to leak inside information about pending corporate takeovers by calling a friend in his native Pakistan, who then traded on the unlawful tips.

But Naseem's defense attorney argued throughout the two-week trial and in closing arguments on Thursday that the government's case is based purely on circumstantial evidence.

"The government's case is nothing more than trial by speculation," Naseem's attorney Michael Bachner told a jury of in U.S. District Court in Manhattan.

Prosecutors claim Naseem, who worked in Credit Suisse's Global Energy Group from 2006 until early last year, left an electronic trail through telephone and computer records of how he fed nonpublic, material information on pending transactions to Ajaz Rahim, a former head of the investment banking group at Faysal Bank Ltd (FYBL.KA: Quote, Profile, Research) in Pakistan.

But Bachner argued on Thursday that Rahim and Naseem were long-time friends, and that Naseem made over 150 calls to Rahim while working at Credit Suisse. Since not every call was followed by a supposedly unlawful trade, Bachner told the jury this was just a random configuration of phone calls between friends and there was no way of knowing what other influences Rahim had.

"There was a ton of information in the marketplace regarding these securities," Bachner told the jury of four men and eight women.

An arrest warrant is pending against Rahim, who is fighting extradition from Pakistan and is not on trial. Rahim's bank account at Julius Baer had been frozen in connection with the investigation into his trading.