(Updates to add information on forfeiture and related SEC case)
By Bernard Vaughan
NEW YORK May 28 Former hedge fund analyst
Matthew Teeple pleaded guilty on Wednesday to a criminal
conspiracy charge in connection with the 2008 takeover of a
The former Artis Capital Management analyst told U.S.
Magistrate Judge James Francis in Manhattan that he received
tips from David Riley, a former chief information officer at
Foundry Networks Inc, including one about the company's pending
$3 billion takeover in 2008 by Brocade Communications Systems
Teeple, 42, pleaded guilty to one count of conspiracy to
commit securities fraud. He also agreed to forfeit $553,890,
according to his plea agreement.
"I deeply regret the role that I played in this illegal
conduct," he told the judge.
Federal prosecutors announced criminal charges against
Riley, 48, Teeple and John Johnson, 47, in March 2013, saying
that subsequent trades on the information led to more than $27
million of improper gains.
Johnson was the former chief investment officer of the
Wyoming Retirement System, which he joined in 2010, after the
government's allegations. Johnson made more than $136,000 on
trades based on information Teeple leaked to him about the
Foundry takeover, prosecutors said.
Johnson pleaded guilty last year to one count each of
securities fraud and conspiracy. Riley pleaded not guilty and is
scheduled to go on trial in July. Johnson has not yet been
sentenced. A related civil case the U.S. Securities and Exchange
Commission brought against the three men is pending.
On Wednesday, Teeple told the judge that Riley tipped him
off to the approximate value of the Brocade deal and about when
it would be announced. Teeple said he knew that Riley was
violating his duty of trust and confidence to Foundry when he
disclosed the inside information.
Teeple, of San Clemente, California, faces a maximum of five
years in prison.
Artis, based in San Francisco, did not immediately return
requests for comment. The firm said last year that it was
cooperating with the investigation.
(Reporting by Bernard Vaughan; Editing by David Gregorio,
Sofina Mirza-Reid and Nick Zieminski)