DOJ: Research Analyst Pleads Guilty in IBM-SPSS Insider-Trading Case
By Nathalie Tadena
A former Australian research analyst pleaded guilty in Manhattan federal court to his role in an insider trading scheme ahead of a $1.2 billion acquisition by International Business Machines Corp. (IBM), the Department of Justice said.
Trent Martin, 34-years-old, of Sydney, Australia, pleaded guilty to one count of conspiracy to commit securities fraud before U.S. District Judge Andrew L. Carter Jr. on Thursday. Mr. Martin was arrested in Hong Kong in December and extradited to the U.S. in March.
According to the indictment, Mr. Martin learned of IBM's plans to acquire software-analytics firm SPSS Inc. from a lawyer working on the transaction before it was announced in 2009. The lawyer considered Mr. Martin a close friend and didn't expect him to share the information or use it to trade.
However, Mr. Martin bought SPSS based on this inside information and in turn, shared the tip with his roommate, Thomas Conradt, a former broker at Euro Pacific Capital Inc, according to the DOJ. Mr. Conradt also bought SPSS common stock and tipped a coworker, who allegedly bought call option contracts in SPSS. Charges against the coworker are pending, the DOJ says.
Mr. Conradt pleaded guilty to insider-trading charges in April.
Mr. Martin told the lawyer on July 23, 2009 that he had bought SPSS common stock and call options on the basis of the inside information that he had disclosed to him. IBM announced its acquisition of SPSS on July 28, 2009. Mr. Martin in 2010 learned of a separate, civil probe by the U.S. Securities and Exchange Commission and told the lawyer he had made an $8,000 profit on the deal, according to the DOJ.
Larry Krantz, an attorney for Mr. Martin, declined to comment.
The conspiracy count carries a maximum sentence of five years in prison and a fine of $250,000. As part of his plea agreement, Mr. Martin said he would to forfeit the proceeds he obtained from the offense. He is scheduled to be sentenced by Judge Carter on March 14.
Write to Nathalie Tadena at firstname.lastname@example.org
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