Posts Tagged With Insider Trading

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Two Individuals Convicted in $819,000 Insider Trading Scheme

On November 10, Christian Keller and John Grey each pled guilty for their role in an insider trading scheme involving material, nonpublic information from Rovi Corporation and another publicly traded company.  Keller provided the material nonpublic information to Gray, who used it to execute securities transactions.  At times, Gray executed the securities transactions in the brokerage accounts of third parties to conceal the scheme.  This scheme took place between 2009 and 2012, and generated illegal
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Second Circuit Questions SAC Trader’s Conviction in Newman’s Wake

On October 28, the Second Circuit wrestled with how Newman should apply to another former SAC trader’s conviction, when it heard oral argument in United States v. Martoma.  Mathew Martoma was convicted by a jury of insider trading crimes and sentenced to nine years’ imprisonment.  He argued that his conviction could not stand in light of Newman, which requires prosecutors to show that sources of   inside information received a personal benefit “of a
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U.S. Attorney Preet Bharara Dismisses Charges Against Michael Steinberg and Six Other Insider Trading Defendants

On October 22, the U.S. Attorney for the Southern District of New York, Preet Bharara, announced that his office was dismissing charges against Michael Steinberg, a former trader at SAC Capital who was convicted of insider trading-related charges after trial, along with six other cooperators who pled guilty as part of United States v. Newman and United States v. Chiasson.  In his statement, Mr. Bharara explained that the decision to dismiss the charges
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Defendant Sentenced to More Than Three Years in Prison for Insider Trading

On October 13, Zachary Zwerko, a senior finance analyst at a pharmaceutical company, was sentenced to 37 months in prison for his role in an insider trading scheme.  Zwerko passed material nonpublic information related to the acquisitions of pharmaceutical companies to a co-conspirator on multiple occasions.  The co-conspirator then traded in securities based on that information.  Zwerko and his co-conspirators at times communicated via disposable cell phones to conceal their actions.  Zwerko received approximately $57,000
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Broker-Dealer Admits Role in Scheme to Trade on Inside Information Stolen from Prominent Law Firm

On September 16, Vladimir Eydelman, a broker-dealer, pled guilty to participating in a five-year conspiracy to trade on merger and acquisition information stolen from a prominent international law firm.  According to court documents, the conspiracy worked as follows: Steven Metro, the managing clerk of the New York office of Simpson Thatcher & Bartlett LLP, obtained nonpublic information about pending transactions by searching the law firm’s computer system.  Metro then disclosed this information to his former
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Former Investment Banking Analyst with J.P. Morgan Securities and Two Friends Charged in $600,000 Insider Trading Scheme

On August 25, an analyst with J.P. Morgan Securities and two longtime friends were charged with participating in an insider trading scheme that netted more than $600,000 in illicit profits.  The analyst, Ashish Aggarwal, was an investment banker in the San Francisco office of J.P. Morgan Securities.  He allegedly disclosed information about upcoming mergers and acquisitions to his friends, who traded on it.  United States v. Aggarwal, 15-cr-465 (C.D. Cal.).  DOJ Press Release
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Father of Former Investment Bank Managing Director Pleads Guilty To Insider Trading Conspiracy

On August 12, Robert Stewart, the father of former investment banker Sean Stewart, pled guilty to participating in a conspiracy to trade on inside information about several mergers and acquisitions that his son had passed on to him.  According to Robert Stewart’s plea agreement, he and a coconspirator (who later became a cooperating witness) used golf-related codes to discuss their trading.  Charges against Sean Stewart remain pending before District Judge Laura Taylor Swain.  United States
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Former Law Firm Senior Systems Engineer Sentenced to 24 Months in Prison for Insider Trading

On, July 29, Dimitry Braverman, a former senior information systems engineer at the Palo Alto law firm Wilson Sonsini Goodrich & Rosati, was sentenced by Judge Paul Engelmayer to 24 months in prison for insider trading.  Braverman pled guilty in November 2014 to one count of securities fraud. He repeatedly used material nonpublic information concerning planned merger and acquisition activity of at least eight clients of the law firm to acquire stock and options, resulting
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Four People Charged for Insider Trading Scheme

On June 3, Steven Fishoff, Ronald Chernin, Steven Costantin, and Paul Petrello were arrested and charged in the District of New Jersey for their alleged participation in an insider trading scheme.  The four men are presidents and owners of multiple trading entities. The government alleges that they made over $3.2 million in profits over the course of three years by trading on the basis of material, nonpublic information.  According to the complaint, Fishoff, Chernin, Constantin,
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Former Senior Executive of Qualcomm Sentenced and Fined for Insider Trading and Money Laundering

On June 26, Jing Wang, former Executive Vice President and President of Global Business Operations for Qualcomm Inc., was sentenced to 18 months in prison and fined $500,000 for his role in a three-year insider trading scheme.  Wang used his position as a high-ranking executive to gain unique access to information about earnings and intended acquisitions, which he then exploited for personal gain.  Wang pled guilty to insider trading, money laundering, and obstruction of justice
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Managing Director of Investment Bank and His Father Charged with Insider Trading

On May 14, a criminal complaint was unsealed charging Sean Stewart and his father, Robert Stewart, with using inside information to trade and cause another to trade in the securities of five separate health care companies.  The complaint alleges that Sean Stewart provided his father with inside information regarding the acquisition of Kendle International Inc. by INC Research, LLC, and the acquisition of Kinetic Concepts, Inc. (“KCI”) by Apax Partners.  Using his son’s trading tips,
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Former Foundry Executive Sentenced after Judge Denied Post-Newman Motion for Acquittal

On April 27, David Riley, a former executive of Foundry Networks, Inc., was sentenced to 78 months in prison for insider trading.  The insider trading scheme, as part of which Riley passed inside information about an acquisition and about earnings results to a hedge fund analyst, yielded $39 million in ill-gotten gains.  Riley’s sentencing followed the denial of his motion for a judgment of acquittal, in which he had argued that that, in light of
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U.S. Supreme Court Declines to Review Rajat Gupta’s Insider Trading Conviction

On April 20, the United States Supreme Court denied the petition for certiorari of former Goldman Sachs director Rajat Gupta, declining to review his conviction for passing stock tips to Raj Rajaratnam, the imprisoned hedge fund manager and founder of the Galleon Group.  Rajaratnam, who filed his petition for certiorari the week before the Second Circuit’s ruling in Newman last year, sought in March to have his sentence vacated in light of Newman by Judge
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Mergers and Acquisitions Analyst Pleads Guilty to Insider Trading

On February 19, Zachary Zwerko, a Senior Finance Analyst in the Financial Evaluation and Analysis Group of the Pharma Company, pled guilty to counts stemming from his participation in an insider trading conspiracy.  As part of his employment, Zwerko worked on potential and actual corporate transactions, including acquisitions, and had access to a corporate computer directory, which contained material, nonpublic information.  Zwerko conveyed this information to a co-conspirator, who purchased stock in companies that were
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Former High-Level Adviser to Bank CEO Charged with Insider Trading

On February 3, Cedric Cañas Maillard, a former high-level advisor to the CEO of a global bank, was charged with insider trading.  The defendant allegedly obtained confidential information about the acquisition of Potash Corporation of Saskatchewan Inc. by BHP Billiton for $45 million.  According to the government, the defendant traded on this nonpublic information and earned a profit of approximately $917,000.  United States v. Maillard, 14-cr-829 (S.D.N.Y.). DOJ Press Release.
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SDNY Appeals Key Insider Trading Ruling in Newman/Chiasson Case

On January 23, the U.S. Attorney’s Office for the Southern District of New York petitioned for rehearing and rehearing en banc of a Second Circuit panel’s ruling issued on December 10, 2014.  The ruling held that to obtain an insider trading conviction against a tippee, the government must prove that the tippee knew both that an insider disclosed confidential information and that the insider did so in exchange for a personal benefit.  Because the district
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Former Investor Relations Executive Sentenced to Prison for Insider Trading

On January 16, Stephen B. Gray of Houston was sentenced to 46 months’ imprisonment following his conviction for securities fraud in an insider trading scheme.  From at least September 2009 through at least May 2012, Gray, the CEO of an investor relations firm, used and traded upon material nonpublic information he learned while preparing press releases for his firm’s clients.  United States v. Gray, 14 Cr. 438 (S.D. Tex.). DOJ Press Release.
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Former Managing Law Clerk for Law Firm Indicted for Insider Trading Scheme

On January 15, Steven Metro, the managing clerk of the New York office of Simpson Thacher & Bartlett LLP, was indicted in the District of New Jersey for his alleged participation in a multiyear insider trading scheme that netted more than $5.6 million in illicit profits.  According to the government, Metro repeatedly provided material, nonpublic information to his friend and former law school classmate Frank Tamayo regarding corporate transactions in which Simpson Thacher represented a
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Second Circuit Court of Appeals Vacates Insider Trading Convictions and Clarifies Requirements of Personal Benefit for Tippee Liability

On December 10, 2014, the U.S. Court of Appeals for the Second Circuit vacated the convictions of Todd Newman, a portfolio manager at Diamondback Capital Management, LLC, and Anthony Chiasson, a portfolio manager at Level Global Investors, L.P., who were convicted of conspiracy to commit securities fraud by a jury in the Southern District of New York in December 2012.  The Second Circuit held that to obtain an insider trading conviction against a tippee, the
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Former Stock Broker Pleads Guilty to Insider Trading Charges

On November 18, Daryl Payton, a former stock broker at a securities trading firm (identified in media reports as Euro Pacific Capital Inc.), pleaded guilty to insider trading charges for his role in a scheme to misappropriate inside information regarding IBM’s 2009 acquisition of a software company, SPSS, Inc.  Manhattan U.S. Attorney Preet Bharara said that Payton received the information from a colleague, who in turn had gotten it from his roommate.  The ultimate source
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Former Senior Systems Engineer at National Law Firm Pleads Guilty to Insider Trading

On November 13, Dmitry Braverman, a former senior systems engineer at a national law firm (identified elsewhere as Wilson Sonsini) pleaded guilty to insider trading before Judge Paul A. Engelmayer in the Southern District of New York.  Specifically, Braverman admitted repeatedly using material nonpublic information concerning planned merger and acquisition activity of at least eight clients of the law firm to acquire stock and options, resulting in profits of more than $300,000.  United States v.
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Former CEO Indicted for Providing Inside Information to Former Baseball Player

On September 24, James V. Mazzo, the former CEO of Advanced Medical Optics, Inc., a medical device company, was indicted by a federal grand jury on insider trading charges.  According to the government, Mazzo provided nonpublic information relating to Abbott’s 2009 acquisition of the company to Douglas DeCinces, a former professional baseball player.  DeCinces allegedly shared this information with other individuals and traded based on this information, realizing illegal profits of $1.3 million.  The insider
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Former Director of Market Intelligence at Investor Relations Firm Pleads Guilty to Insider Trading

On September 24, Michael Lucarelli, the former Director of Market Intelligence at Lippert/Heilshorn & Associates, Inc. (“LHA”), an investor relations firm, pled guilty in the Southern District of New York to insider trading.  Specifically, Lucarelli admitted to repeatedly using nonpublic information that he acquired during his employment at LHA to take positions in the stock of LHA clients over the course of the year-long scheme.  According to the government, Lucarelli took positions in LHA client
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Individual Pleads Guilty to Receiving and Passing on Inside Information Stolen from New York Law Firm

On September 19, Frank Tamayo surrendered to the FBI and pled guilty before Judge Michael A. Shipp of the District of New Jersey pursuant to an information charging him with one count of conspiracy to commit securities and tender offer fraud, one count of securities fraud, and one count of tender offer fraud.  Tamayo admitted to obtaining material nonpublic information from a former law school classmate who stole the information from his then-employer, Simpson Thatcher
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