| July 8
July 8 Two former executives at Carter's Inc
and a New York hedge fund manager received prison
sentences on Tuesday for engaging in an insider trading
conspiracy involving the children's clothing company's stock.
Eric Martin, a former vice president of investor relations
at Carter's, was sentenced to two years in prison by a federal
judge in Atlanta after pleading guilty in 2012 to conspiracy to
commit securities fraud and wire fraud.
Richard Posey, a former vice president of operations at
Carter's who prosecutors said provided illegal tips to Martin
after Martin left the company, was sentenced by U.S. District
Judge Richard Story to one year and three months in prison in
light of his June 2013 guilty plea.
Mark Megalli, a former fund manager at Level Global
Investors who prosecutors said was one of a number of investors
at hedge funds who received tips from Martin, was sentenced to
one year and one day in prison after pleading guilty in
The judge also ordered restitution be paid in the amounts of
$950,000 by Martin, $750,000 by Posey, and $50,000 by Megalli.
The sentencings were the latest development in a broad
investigation into what prosecutors called the first major
criminal insider trading case to be brought in Atlanta.
"Illegal insider trading undermines confidence in the
nation's stock markets," Atlanta U.S. Attorney Sally Quillian
Yates said in a statement. "Today's sentences are a step towards
restoring that confidence."
Lawyers for the three men either declined comment or did not
respond to requests for comment.
Prosecutors said from 2005 to 2009, Martin, 44, disclosed
details about Carter's forthcoming earnings and other
developments to an unnamed former Wall Street analyst who
cooperated in the probe.
They said after Martin left Carter's in 2009, he continued
to receive inside information about its earnings from his friend
Posey, 53, through July 2010.
Martin traded on the information and continued giving tips
to the ex-analyst, and in September 2009 began providing inside
information to investment firms that would hire him as a
consultant, including Level Global, according to prosecutors.
Megalli, a Level Global portfolio manager, in turn traded on
that information, enabling Level Global to earn $3 million,
Following the three men's pleas, prosecutors in May brought
charges against a fourth man, Steven Slawson, co-founder of New
Jersey-based Titan Capital Management, who they said also
engaged in insider trading in Carter's. He has pleaded not
The SEC has separately brought civil charges against several
people. Carter's has cooperated with the investigation.
The cases in U.S. District Court, Northern District of
Georgia are U.S. v. Martin, No. 12-cr-364; U.S. v. Posey, No.
13-cr-239; and U.S. v. Megalli, No. 13-cr-442.
(Reporting by Nate Raymond in New York; Editing by Mohammad