Find Laws Find Lawyers Free Legal Forms USA State Laws
Home » Legal News » Researcher Guilty in $61.8 Million Insider Trading Scheme

Researcher Guilty in $61.8 Million Insider Trading Scheme

October 01, 2012 04:26pm  
Researcher Guilty in $61.8 Million Insider Trading Scheme

On September 28, 2012, the US Attorney’s Office for the Southern District of New York announced that Jon Horvath, a former hedge fund research analyst, has pleaded guilty to his role in a $61.8 million insider trading scheme.  According to the FBI, the scheme involved numerous analysts and managers at several different hedge funds and investment firms.  The defendants traded non-public information about technology companies like Dell Inc. and NVIDIA Corp.

John Horvath was charged along with Danny Kuo, Todd Newman, and Anthony Chiasson in January, 2012.  Kuo already pleaded guilty, and the other two men are awaiting their trial.  

According to the indictment, Horvath engaged in insider trading from 2007 to 2009.  During one particular crime, Horvath received inside information about Dell and NVIDIA from other research analysts.  Horvath knew the information was coming from employees at public companies, and thus, he knew the employees were severing their loyalty to the company.  After receiving the information, he reported back to his portfolio manager.  Trades were then executed in Dell and NVIDIA.  

The FBI reports that Horvath has pleaded guilty to “one count of conspiracy to commit securities fraud and two counts of securities fraud.”  Horvath faces a maximum sentence of 5 years in prison and a fine of $250,000 for the conspiracy count.  He faces a maximum sentence of 20 years in prison and a fine of $5 million.  Horvath agreed to hand over all proceeds from the inside training in the plea agreement.  

The guilty plea was announced by United State’s Attorney Preet Bharara, who also went on to praise the work of the FBI and the U.S. Securities and Exchange Commission.  The investigation of this case is part of the Financial Fraud Enforcement Task Force created by President Obama in November of 2009.  

Source: Federal Bureau of Investigation

Comments

Must Read

 Mail Fraud Quick Overview Mail Fraud Quick Overview
Mail fraud refers to any deceitful crime that includes the use of the postal system.
Accountant Fraud At A Glance Accountant Fraud At A Glance
Accountant fraud (or corporate accounting scandals) often occurs as a result of an accountant not disclosing factual statements to their clients (individuals or businesses) about the state of their finances.
All You Need To Know About Mail Fraud Charges All You Need To Know About Mail Fraud Charges
Mail fraud charges are used most frequently in federal white collar crime cases to either make an initial charge or add a charge to a list of existing ones.
All You Need To Know About Reporting Blindness All You Need To Know About Reporting Blindness
One of the most common disability fraud types  Disability fraud falling into the category of "reporting blindness" can also include criminals taking advantage of acts intended to help the legally blind return to work.
All You Need to Know About Supreme Court Cases All You Need to Know About Supreme Court Cases
There are two cases that involve the proper criminal procedure involving the prosecution of wire fraud.
All You Need to Know About The History Identity Theft All You Need to Know About The History Identity Theft
Identity theft, though it has taken on new forms and has become significantly more common, is not a new crime.
Bait and Switch Definition Bait and Switch Definition
It may not necessarily be all that obvious all the time, but the bait and switch tactic used by both the retail and political world should be of no surprise to people living in nations which are fueled by consumerism and politics.
Bankruptcy Fraud At A Glance Bankruptcy Fraud At A Glance
Bankruptcy fraud is any kind of fraud involving filing for bankruptcy in an attempt to gain some kind of profit from the overall scheme.
Tips