THE U.S. Securities and Exchange Commission and the U.S. Attorney's Office are pressing separate charges against two brokers which could result in hefty penalties and a Federal prison sentence.
The SEC filed charges Wednesday 25 June against two more broker dealers for what it claims was insider trading during IBM's takeover of SPSS Inc. in 2009.
The U.S. Attorney's Office for the Southern District of New York is pressing criminal charges, in a parallel court case, which could result in a five year Federal prison sentence upon conviction.
The former New York based brokers, Benjamin Durant III and Daryl M. Payton, ex Euro Pacific Capital employees at their Manhattan office, are accused of acting upon a tech tip from fellow broker, Thomas C. Conradt.
The insider trading scandal has already scalped merger & acquisition corporate lawyer Mike Dallas, a New Zealand M&A specialist who breached client confidentiality by sharing information with his Australian friend and RBS equities analyst - Trent Martin. The analyst then shared the tech tip with his broker dealer room mate Conradt,who in turn told his colleague David J. Weishaus and the trio purchased SPSS Inc stock ahead of the M&A announcement.
The SEC's latest charges against two of Conradt's former co-workers, involve a civil action to recover 'ill gotten gains' plus $300k penalties for alleged profits of more than $300k made by Durrant III and Payton acting on that tech tip.
The SEC claims the group met in a Hotel to discuss how best to deal with any post trade inquiries about insider trading suspicions. None of the principal firms for whom the ex brokers worked are implicated in any way with the SEC allegations against the defendants mentioned. The firm's compliance office monitoring programs red flagged suspicious trades which in turn steam rolled the SEC inquiry.