Maryland man to plead guilty in insider-trading case -Justice Dept.
WASHINGTON, April 3
WASHINGTON, April 3 (Reuters) - A Maryland man will plead guilty to charges of conspiring to commit insider trading, in what marks the 10th criminal prosecution stemming from an insider-trading ring orchestrated by a former Wells Fargo investment banker, the U.S. Justice Department said.
The U.S. Attorney's Office for the Western District of North Carolina announced Thursday that 33-year-old Rockville resident Walter Donald Wagner has agreed to plead guilty to one count of insider-trading conspiracy.
He could face up to five years in prison and a $250,000 fine, prosecutors said.
The Securities and Exchange Commission also Thursday filed parallel civil charges against Wagner and another man, Alexander Osborn of Alexandria, Virginia for their roles in the scheme.
The SEC said Wagner has agreed to settle the civil charges and disgorge his ill-gotten gains.
Attorneys for Wagner and Osborn could not be immediately reached for comment.
U.S. authorities filed their first charges involving the insider-trading ring back in December 2012.
The ring was uncovered through an FBI investigation dubbed "Operation Insider Out."
Prosecutors alleged that Wells Fargo banker John Femenia stole non-public information about upcoming mergers from the bank in exchange for kickbacks from his high school friend Shawn Hegedus, and Hegedus' girlfriend, Danielle Laurenti.
The kickbacks came in several forms, prosecutors alleged, from gold bars to cash.
Hegedus, Laurenti and a web of other friends and acquaintances then used the information to place profitable trades.
The insider-trading scheme netted its participants $11 million.
Prosecutors said Thursday that Femenia was a college friend of Wagner's, and recruited him to participate in the insider-trading ring. Wagner reaped over $650,000 thanks to the illegal tips, they added.
Femenia, Hegedus and Laurenti and six other co-conspirators all previously pleaded guilty to criminal charges. (Editing by Eric Walsh)