If you will try, they will sure find you.
The Securities and Exchange Commission today filed insider trading charges against an accountant and her friend, whom she illegally tipped with confidential information in advance of her company’s quarterly performance announcements in exchange for all-expense paid travel and other expensive gifts. The alleged insider trading scheme generated profits of more than $6.2 million and was uncovered by the SEC through analysis and technology that it uses to detect suspicious trading activity.
The SEC’s complaint seeks permanent injunctions, disgorgement with prejudgment interest, and penalties. Meaning the defendants will lose the profit (6.2 million) and they will pay interest and penalties.
The conspiracy operated between 1 November 2006 and 23 March 2010. During that time, the defendant held senior positions at Morgan Stanley, Lehman Brothers and Deutsche Bank. He used those positions to source inside information, which he passed on to his close friend, who in turn caused trades to be placed for the benefit of both defendants.
The Defendants employed elaborate strategies designed to prevent the authorities from uncovering their activities. These included using unregistered mobile telephones, safety deposit boxes, and encoded and encrypted records. They also used multifarious methods to distribute the benefit they obtained from their criminal enterprise.
Whilst the Defendants went to great lengths in an effort to ensure that their pursuits went undetected, their meticulous record keeping ultimately proved to be their downfall in the confiscation proceedings. Those records detailed trading in a variety of stocks and the amounts that each was to benefit as a result. This made it far easier for the FCA to demonstrate the full extent of each defendant’s benefit from their criminal conduct.
The Defendant was sentenced to 4 and a half years’ imprisonment and his friend to 3 and a half years’ imprisonment. Moreover, Crown Court made confiscation orders in the sum of £1,074,236 against the Defendant and £624,521 against his friend.