Insider Trading Roundup: Ex-Broker Pleads Guilty to Securities Fraud Involving IBM Acquisition, BNP Officials Are Under Scrutiny, and Ex-Billionaire Is Tried In Historic Brazilian Case

Former Stockbroker Pleads Guilty to Insider Trading in IBM Case
Daryl Payton, an ex-trader at Euro Pacific Capital Inc., has pleaded guilty to conspiracy to commit securities fraud. Payton was involved in an insider trading scam that revolved around software manufacturer SPSS Inc., which IBM acquired in 2009. A U.S. judge accepted his plea.

Three other people have admitted that they shared and traded on secret information about the deal when it was in the works. The confidential data came from Michael Dallas, a corporate lawyer who has not been charged but was identified in a related S.E.C. securities fraud lawsuit.

Dallas is accused of sharing the secret information with Trent Martin, a Royal Bank of Scotland (RBS) analyst, who then told his roommate, Euro Pacific broker Thomas Conradt. The latter shared the tips with others, including Payton, who bought shares and options in SPSS.

French Prosecutors Probe BNP Paribas Officials Over Insider Trading Allegations
Prosecutors in France investigating insider trading allegations related to BNP Paribas SA’s (BNP) $9 billion settlement in the U.S. are looking at a number of the bank’s senior officials over their possible involvement. They want to know how much the bank’s directors knew about its exposure to litigation risks in this country when they sold shares in 2014. Depending on what they discover, prosecutors may decide to instigate a formal probe.

In June, BNP Paribas not only settled but also pleaded guilty to crimes involving the violation of U.S. sanctions against Cuba, Iran, and Sedan. The bank is accused of concealing billions of dollars in financial transactions that violated the sanctions, as well as hiding its involvement in this process. As part of the deal, BNP agreed to a yearlong ban on its ability to conduct certain transactions with U.S. dollars.

Former Brazilian Billionaire Goes To Trial For Insider Trading
In the first insider trading case to go to trial in Brazil, Eike Batista, who was once the richest man in that country, must defend himself against charges that he was allegedly involvement in a market manipulation scam related to his petroleum company OGX. Prosecutors claim that Batista traded OGX’s stock because he had advanced information that certain petroleum fields were lacking in economic viability. They contend that his actions resulted in about $580 million in damages.

Also, not long after Batista sold his OGX shares, the company defaulted on $5.8 billion in debt. This compelled OGX to file for the largest-ever corporate bankruptcy in Latin America. While creditors may get some of their funds back, shareholders lost everything.

Batista, who was once listed seventh on Forbes’ billionaires list, says that he is now in serious debt.

Eike Batista’s Insider Trading Case in Brazil to Test a Much-Criticized Justice System, The New York Times, November 16, 2014

U.S. judge accepts broker’s guilty plea in IBM insider trading case, Reuters, November 18, 2014

BNP Officials Examined in Insider-Trading Probe, The Wall Street Journal, November 18, 2014


More Blog Posts:

Rajaratnam Brother Settles Insider Trading Charges Involving Hedge Fund Advisory Firm Galleon Management, Stockbroker Fraud Blog, October 23, 2014

Galleon Group Founder’s Brother Pleads Not Guilty to Insider Trading, Institutional Investor Securities Blog, April 2, 2013

Ex-Goldman Sachs Board Member Accused of Insider Trading with Galleon Group Co-Founder Seeks to Have SEC Administrative Case Against Him Dropped, Institutional Investor Securities Blog, April 19, 2011