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Former Sales Representative Pleads Guilty
to Insider Trading Scheme
LEV L. DASSIN, the Acting United States Attorney for
the Southern District of New York, announced that FREDERICK E.
BOWERS pleaded guilty today to insider trading charges before
United States District Judge GEORGE B. DANIELS in Manhattan
federal court. According to the Information to which BOWERS
pleaded guilty and statements made during the guilty plea
proceeding:
BOWERS was a sales representative at a multinational
investment bank and broker-dealer (the "Bank") in New York, New
York. BOWERS obtained material nonpublic information about at
least two mergers and acquisitions from a co-conspirator business
partner of his. The business partner, in turn, obtained the
information from his wife, who worked at an international
communications firm, and who expected her husband to keep
confidential any material nonpublic information he learned about
her and her firm's work. Instead, her husband gave the
information to BOWERS, who passed it on to a client, who in turn
used the information to trade in the securities of companies
involved in two different deals. Specifically, from December
2005 through December 2007, BOWERS' client traded on inside
information regarding mergers and acquisitions involving Azstar
Corporation and Mercantile Bankshares Corporation, earning tens
of thousands of dollars of illegal profits. In exchange for
providing the material nonpublic information, the client paid
BOWERS and his business partner a total of approximately $12,000
in cash.
At today's proceeding, BOWERS pleaded guilty to one
count of conspiracy to commit insider trading and one count of
insider trading. He also agreed to forfeit the proceeds of the
scheme, including $12,000 in cash payments.
BOWERS, 41, of New York, New York, faces a maximum
sentence of 5 years in prison on the conspiracy charge and 20
years in prison on the insider trading charge. He is scheduled
to be sentenced by Judge DANIELS on August 20, 2009 at 9:45 a.m.
Mr. DASSIN praised the work of the Federal Bureau of
Investigation, and thanked the United States Securities and
Exchange Commission for its assistance. He added that the
investigation is continuing.
Assistant United States Attorneys JOAN M. LOUGHNANE and
REED M. BRODSKY are in charge of the prosecution.
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