New York Paralegal Blog

Is success measured by how dishonest a person is ? The charges unsealed today describe cheating coming and going – specifically, insider trading first on the long side, and then on the short side, on a scale that has no historical precedent.

Manhattan District Attorney Cyrus R. Vance, Jr., announced the sentencing of TRACEY NELSON, 25, to 6-to-18 years in prison for her role in an organized identity theft and financial crime ring that relied on corrupt employees at banks, a non-profit institution, a high-end car dealership, and a real estate management company to steal and traffic in the names, dates of birth, addresses, Social Security numbers, and financial account information of unsuspecting victims. The conspirators used the stolen information to conduct fraudulent financial transactions with the victims’ identities.

Preet Bharara, the United States Attorney for the Southern District of New York, announced that ANIL KUMAR, a former senior partner at McKinsey & Company (“McKinsey”), was sentenced today to two years of probation and ordered to forfeit $2,260,000 for his participation in an insider trading scheme in which he provided material, nonpublic information (“Inside Information”) stolen from McKinsey and its clients to Raj Rajaratnam, the head of Galleon Group (“Galleon”), who then traded based, in part, on the Inside Information.

Washington, D.C., May 7, 2012 — The Securities and Exchange Commission today charged a former paralegal at a Kalispell, Mont.-based semiconductor company and her father with insider trading on confidential information about the 2009 acquisition of the company.

Washington, D.C., March 8, 2012 — The Securities and Exchange Commission today charged a former executive at a Coca-Cola bottling company with insider trading based on confidential information he learned on the job about potential upcoming business with The Coca-Cola Company.

Preet Bharara, the United States Attorney for the Southern District of New York, and Janice K. Fedarcyk, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), today announced charges against seven investment professionals, who worked at three different hedge funds and two other investment firms, for engaging in a scheme in which they provided each other with material, non-public information (“Inside Information”) about two publicly traded technology companies, Dell, Inc. (“Dell”) and NVIDIA (“NVDA”).

DREW K. BROWNSTEIN, a/k/a “Bo Brownstein,” CEO of a Denver-based hedge fund (the “Hedge Fund”), pled guilty in Manhattan federal court to securities fraud arising from an insider trading scheme in which he received material, non-public information (“Inside Information”) about a pending acquisition of Mariner Energy, Inc. (“Mariner”) by Apache Corporation (“Apache”). BROWNSTEIN traded on the Inside Information he received from his friend DREW CLAYTON PETERSON (“DREW PETERSON”), who got it from his father, Mariner board member H. CLAYTON PETERSON (“CLAYTON PETERSON”). When the acquisition was publicly announced, BROWNSTEIN realized nearly $2.5 million in profits for himself, the Hedge Fund, and others. BROWNSTEIN pled guilty today before U.S. District Judge ROBERT P. PATTERSON, JR.

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that RAJ RAJARATNAM was sentenced today in Manhattan federal court to 11 years in prison stemming from his involvement in the largest hedge fund insider trading scheme in history.

CRAIG DRIMAL was sentenced today in Manhattan federal court to 66 months in prison for his participation in an insider trading scheme in which he obtained and traded on material, nonpublic information (“Inside Information”), including information misappropriated from the law firm of Ropes & Gray. DRIMAL pled guilty to five counts of securities fraud and one count of conspiracy on April 26, 2011. U.S. District Judge RICHARD J. SULLIVAN imposed today’s sentence.

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that attorney JASON GOLDFARB was sentenced today in Manhattan federal court to three years in prison for his participation in an insider trading scheme in which he gave material, nonpublic information (“Inside Information“) that had been misappropriated from the law firm of Ropes & Gray to ZVI GOFFER for the purpose of securities trading.

PREET BHARARA, the United States Attorney for the Southern District of New York, and JANICE K. FEDARCYK, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced that STANLEY NG, formerly the SEC reporting manager at Marvell Technology Group, Ltd. (“Marvell”), was arrested this morning on charges relating to his involvement in an insider trading scheme.

PREET BHARARA, the United States Attorney for the Southern District of New York, announced today that WALTER SHIMOON pled guilty in Manhattan federal court to conspiracy and securities fraud charges arising from schemes in which he provided confidential information, including material, nonpublic information (“Inside Information”), to employees and clients of an expert-networking firm (the “Firm”). SHIMOON also provided Inside Information to a consultant who operated a research firm (the “Consultant”) and then provided the information to certain money managers. SHIMOON pled guilty before U.S. District Judge JED S. RAKOFF. According to the information, a complaint previously filed in this case, and statements made during today’s guilty plea proceeding: At all relevant times, SHIMOON worked as a director of Bbusiness development at Flextronics International, Ltd. (“Flextronics”), a technology company that designed, engineered, and manufactured electronics products. During that time, S...

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that attorney ARTHUR CUTILLO was sentenced today in Manhattan federal court to 30 months in prison for his participation in an insider trading scheme in which he misappropriated material, nonpublic information (“Inside Information“) from his employer for the purpose of securities trading. CUTILLO previously pled guilty to one count of conspiracy and one count of securities fraud on January 14, 2011. U.S. District Judge RICHARD J. SULLIVAN imposed today’s sentence. U.S. Attorney PREET BHARARA said: “Attorney Arthur Cutillo exploited his access to confidential information in exchange for cash. With today’s sentence, he now joins a growing group of privileged professionals who are paying a high price for insider trading.“ According to the charging documents and court proceedings in this case: At all relevant times, CUTILLO worked at the law firm of Ropes & Gray LLP. In 2007 and 2008, he, a...

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that SAMIR BARAI, a/k/a “Sam Barai,” a portfolio manager at two different New York based hedge funds, and SON NGOC NGUYEN, a/k/a “Sonny,” an employee in the finance department of NVIDIA Corporation (“NVIDIA”), pled guilty today in Manhattan federal court to charges arising out of their involvement in separate insider trading schemes. BARAI, who had previously been arrested on February 8, 2011, and charged in a criminal complaint, also pled guilty to additional charges, including obstruction of justice, in connection with the insider trading scheme. According to the informations to which BARAI and NGUYEN pled guilty, statements made during the plea proceedings, and other court documents: Between 2006 and 2010, BARAI worked as a portfolio manager at two hedge funds located in New York, New York. During that time period he and his co-conspirators, including DONALD LONGUEUIL, NOAH FREEMAN, JASON ...

Washington, D.C., May 26, 2011 — The Securities and Exchange Commission today charged a former managing director of The NASDAQ Stock Market with insider trading on confidential information that he stole while working in a market intelligence unit that communicates with companies in advance of market-moving public announcements. Additional Materials Litigation Release No. 21981 SEC Complaint The SEC alleges that Donald L. Johnson traded in advance of such public announcements as corporate leadership changes, earnings reports and forecasts, and regulatory approvals of new pharmaceutical products. He often placed the illegal trades directly from his work computer through an online brokerage account in his wife’s name. Johnson obtained illicit trading profits of more than $755,000 during a three-year period. Johnson also has been charged in a parallel criminal action announced by the U.S. Department of Justice today. “This case is the insider trading version of the...

WASHINGTON – The principal and co-owner of Integra Capital Management LLC, a North Carolina company, was arrested in Denton, N.C., today for defrauding commodities trading investors of more than $3.2 million, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Anne M. Tompkins of the Western District of North Carolina. Nicholas Cox, 34, a North Carolina resident, is charged in an indictment returned on May 17, 2011, by a federal grand jury in the Western District of North Carolina, with one count of conspiracy to commit mail fraud, seven counts of mail fraud and one count of conspiracy to commit money laundering. Following his arrest, Cox made his initial appearance today before U.S. Magistrate Judge David Cayer in Charlotte, N.C. The indictment alleges that between September 2006 and January 2009, Cox and his co-conspirator, Rodney Whitney, who was also a principal and co-owner of Integra, engaged in a scheme to defraud investors in com...

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that DONALD LONGUEUIL pled guilty today to conspiracy and securities fraud charges arising from an insider trading scheme in which he obtained and traded on material, nonpublic information. LONGUEUIL participated in this scheme while working as a research analyst and a portfolio manager at two different hedge funds. During his plea allocution and in his plea agreement, LONGUEUIL admitted that, upon reading of the Government's investigation in the press, he destroyed and disposed of a flash drive and hard drives relevant to his securities fraud conviction. LONGUEUIL pled guilty before U.S. District Judge JED S. RAKOFF. Manhattan U.S. Attorney PREET BHARARA stated: "Less than three months after being arrested on insider trading charges, Donald Longueuil has pled guilty. He is the latest example of a privileged professional who thought he was above the law and found out the hard way he su...

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that CRAIG DRIMAL pled guilty today to conspiracy and securities fraud charges arising from a scheme in which he obtained and traded on material, nonpublic information, including information misappropriated from the law firm of Ropes & Gray. DRIMAL pled guilty before U.S. District Judge RICHARD J. SULLIVAN. According to the Indictment, a Complaint previously filed in this case, and statements made during today’s guilty plea proceeding: In 2007 and 2008, CRAIG DRIMAL obtained material, nonpublic information ("Inside Information") from ZVI GOFFER about several mergers and acquisitions of public companies, and traded based on that Inside Information. The Inside Information included information provided by two Ropes & Gray attorneys, ARTHUR CUTILLO and BRIEN SANTARLAS, regarding the potential acquisition of 3Com Corporation ("3Com") and the potential acquisition of Axc...

LOS ANGELES—A former vice president in the Los Angeles office of the Lippert Heilshorn & Associates investor relations firm has been sentenced to 16 months in federal prison for providing confidential information that was used in an insider trading scheme that generated $1.7 million in illegal profits for his associates. Zachary Bryant, 40, of Long Island City, New York, was sentenced Monday by United States District Judge John F. Walter. Bryant pleaded guilty last year to one count of conspiring to commit insider trading.

Washington, D.C., March 1, 2011 – The Securities and Exchange Commission today announced insider trading charges against a Westport, Conn.-based business consultant who has served on the boards of directors at Goldman Sachs and Procter & Gamble for illegally tipping Galleon Management founder and hedge fund manager Raj Rajaratnam with inside information about the quarterly earnings at both firms as well as an impending $5 billion investment by Berkshire Hathaway in Goldman. The SEC’s Division of Enforcement alleges that Rajat K. Gupta, a friend and business associate of Rajaratnam, provided him with confidential information learned during board calls and in other aspects of his duties on the Goldman and P&G boards. Rajaratnam used the inside information to trade on behalf of some of Galleon’s hedge funds, or shared the information with others at his firm who then traded on it ahead of public announcements by the firms. The insider trading by Rajaratnam and others generated mo...