Wednesday, October 24, 2007

Former General Counsel Convicted of Insider Trading in His Company's Stock

The former general counsel for Amkor Technology, Inc. was convicted on securities fraud charges related to his trading in company stock (indictment here).  According to a press release (here) issued by the U.S.  Attorney's Office for the Eastern District of Pennsylvania:

Heron traded Amkor securities while in possession of material, non-public information including, among other things, the company’s financial condition, proposed mergers and/or acquisitions, and potential litigation exposure. He generally made his trades via the Internet using his office computer to access his online personal brokerage account. As a result of his illegal trades, Heron realized approximately $290,000 in gains and/or avoided losses.

The trades included buying put options on Amkor's stock as a bearish bet on the stock before the announcement of an earnings decline that caused a 32% drop in the share price.  It's not clear whether the former GC tried to hide his trading by using a fictitious name on the account, and he placed the trades from his office computer, so it was easy to trace.  This was not exactly the most sophisticated insider trading scheme even launched.  The SEC has a pending civil injunctive action (here) alleging the same violations. (ph)

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Insider Trading, Prosecutions, Verdict | Permalink

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