Former e-commerce executive pleads guilty in eBay insider case

Fri May 9, 2014 9:48pm EDT

A placard advertising an eBay app for Apple is shown in San Francisco, California, April 22, 2009. REUTERS/Robert Galbraith

A placard advertising an eBay app for Apple is shown in San Francisco, California, April 22, 2009.

Credit: Reuters/Robert Galbraith

Related Topics

(Reuters) - A former executive at an e-commerce company that was acquired in 2011 by online retailer eBay Inc pleaded guilty on Friday to insider trading in connection with the takeover.

Christopher Saridakis, 45, who had led the marketing solutions division of GSI Commerce Inc, pleaded guilty to one count of securities fraud for leaking material nonpublic information in March 2011 about the planned merger.

The defendant entered his plea before U.S. District Judge Stewart Dalzell in Philadelphia, and was released on $300,000 bail, court records show. Saridakis faces a maximum 20 years in prison at his sentencing, which is scheduled for September 19.

"Mr. Saridakis has pleaded guilty and accepted responsibility," said his lawyer, Richard Zack, a partner at Pepper Hamilton. "He has done everything he can to make things right, and he regrets the pain that his conduct has caused his family and friends."

GSI shares rose nearly 51 percent on March 28, 2011, after eBay announced its $1.96 billion purchase of the King of Prussia, Pennsylvania-based company.

Investigators said Saridakis encouraged two relatives and two friends to trade on his tips, leading to more than $300,000 of illegal profit.

On April 25, the U.S. Securities and Exchange Commission said Saridakis, of Greenville, Delaware, agreed to pay $664,822 and accept an officer and director ban to settle related civil charges.

Six other defendants, including a Manhattan hair salon owner, settled SEC charges over trading ahead of the merger.

One of the settling defendants was an unnamed trader who the SEC said provided "early, extraordinary and unconditional" cooperation. The regulator entered a "nonprosecution" agreement with that defendant, its first with an individual.

The cases are U.S. v. Saridakis, U.S. District Court, Eastern District of Pennsylvania, No. 14-cr-00210; and SEC v. Saridakis et al in the same court, No. 14-02397.

(Reporting by Jonathan Stempel in New York; editing by Matthew Lewis)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
dj-janos wrote:
$664,822 in fines all so family and friends could net $300,000? seriously? Mr. Saridakis is a complete fool.

The SEC does not mess around. Don’t people realize that they can see that someone purchased a large amount of shares just a few days before a merger and then see it being sold shortly afterwards? Inside trading can easily be caught these days.

May 14, 2014 2:00am EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.