Thursday, September 25, 2014

SEC Charges Brooklyn Man for Facilitating Insider Trading Scheme Via Post-It Notes at Grand Central Terminal

The SEC charged a Brooklyn man with facilitating a $5.6 million insider trading scheme that typically involved the passing of illegal tips via napkins or post-it notes at Grand Central Terminal.
Earlier this year, the SEC charged a stockbroker and a law firm managing clerk with insider trading and alleged they were connected by a mutual friend who served as a “middleman” in an effort to keep the two unlinked.  In a separate complaint filed in U.S. District Court for the District of New Jersey, the SEC has identified the middleman.  The SEC alleges that the middleman received material nonpublic information from another individual about 13 impending corporate deals involving clients of the law firm where he worked.  The middleman then tipped his stockbroker who used the confidential information to illegally trade for himself and for the middleman and other customers.  The middleman allocated a portion of his ill-gotten profits for eventual payback to the tipper for the inside information.

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