7 charged in $61M single-stock insider trade case
NEW YORK (AP) — A hedge fund co-founder, a hedge fund portfolio manager, four financial analysts and a Dell Inc. employee teamed up in a record-setting insider trading scheme that netted more than $61.8 million in illegal profits based on trades of a single stock, authorities said today.
Authorities described a cozy network of friends in finance who made the most of their connections with corrupt employees of technology companies.
The scheme was outlined in a criminal complaint in U.S. District Court in Manhattan that charged four of the men with conspiracy to commit securities fraud and securities fraud, among other charges. Three analysts have already pleaded guilty and are cooperating with the government, according to the court papers.
The insider trading plot as authorities portrayed it was noteworthy for its size.
Last month, hedge fund founder Raj Rajaratnam began serving an 11-year prison term — the longest ever given in an insider trading case — for a scheme that prosecutors said produced as much as $75 million in profits on dozens of trades over a multiyear period. That prosecution resulted in more than two dozen convictions and led to a spinoff probe that produced even more arrests.
In the new case, prosecutors again are highlighting its size, saying the co-conspirators netted more than $61.8 million in illegal profits based on trades of a single stock from 2008 through 2009.