Wednesday, July 26, 2006

SEC Adds Three More Croatian Defendants to Insider Trading Case

The SEC amended its complaint in the insider trading case that grew out of suspicious call option purchases of Reebok before its announced takeover by Adidas in August 2005 by adding three new overseas defendants, all with ties to Croatia: Bruno Verinac, Antun Dilber, and Anto Krsic.  The case began with trading by a person identified as a retired seamstress in Croatia, and has grown into a large-scale insider trading ring involving tips from workers at the printer for BusinessWeek, an analyst at Merrill Lynch, and a member of a federal grand jury in New Jersey investigating Bristol-Myers Squibb.  The three new defendants, along with three others already named, traded through accounts at Direktanlage.at AG, an Austrian bank.  According to the SEC litigation release (here):

The complaint also identifies additional insider trading by the Direktanlage Traders based on newly-obtained information, bringing the total illicit gains netted by the insider trading ring to over $6.8 million. In total, the Direktanlage Traders netted over $445,000 of these illicit gains in trades placed in 17 different securities through Direktanlage based on material, non-public information stolen by a former investment banker employed at Merrill Lynch & Co., Inc., and two former employees at a printing plant where BusinessWeek magazine is printed.

A number of individuals have been charged criminally in the Southern District of New York, and the case is one the most widespread insider trading cases seen in years. (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2006/07/sec_adds_three_.html

Civil Enforcement, Insider Trading | Permalink

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