A former clerk of an international law firm pled guilty to insider trading last week. According to Justice.gov the clerk obtained confidential insider information (also known as “material nonpublic information”) related to mergers, acquisitions and stock purchases and used it to profit on his personal transactions. He is also alleged to have passed this insider information to bankers who personally profited from this information as well.
The ex-law clerk was not involved with the transactions on behalf of the firm. Rather, he apparently accessed the information through the firm’s computer network by performing organic searches on topics such as “merger agreement,” “bid letter,” “engagement letter,” and “due diligence.”
According to the FBI by October 2013, the clerk made profits of about $168,000 on 13 planned corporate transactions. In March he was charged with security fraud and conspiracy. In September he rejected a previous plea offer. He now faces the possibility of 20 years in prison and a $5 million fine for the security fraud charge, along with an additional five years in prison and a $250,000 fine for the conspiracy charge.
The other two conspirators are awaiting sentencing after pleading guilty, one of whom has been ordered to pay back bonuses he received of close to $3 million.
Although there has been a great deal of discussion about insider trading law recently due to a new case out of the Second Circuit, nbsp; link, it appears that those issues were not present in this case.
At Cheshire Parker Schneider & Bryan our Raleigh federal criminal defense attorneys represent anyone charged with insider trading or other fraud offenses. If you or a loved one are facing such charges, call us for a free consultation today.