3 Min Read
NEW YORK (Reuters) - A former stock broker pleaded guilty on Thursday to charges stemming from a conspiracy to engage in insider trading ahead of a 2009 acquisition by IBM Corp (IBM.N).
David Weishaus, 33, told a federal judge in Manhattan that he had traded on a tip a friend got from his roommate that IBM had agreed to buy Chicago-based software company SPSS Inc before the $1.2 billion deal was publicly announced.
"I know my conduct was wrong, and I apologize to the court and my family, especially my mother and father," Weishaus said.
The plea came amid a crackdown on insider trading by New York federal prosecutors, who since October 2009 have secured convictions of 78 people. On Wednesday a jury convicted Michael Steinberg, a portfolio manager at Steven A. Cohen's SAC Capital Advisors accused of insider trading.
Weishaus, whose case is unrelated to Steinberg's, was first indicted in November 2012 and faced a January 21 trial date. He pleaded guilty to one count of conspiracy to commit securities fraud and one count of securities fraud.
The plea is subject to a cooperation agreement. In a statement, Preet Bharara, the Manhattan U.S. attorney, said the investigation is continuing. The indictment mentions two unnamed co-conspirators who also traded ahead of the IBM deal.
Weishaus, a former employee at Westport, Connecticut-based Euro Pacific Capital Inc, was the last of three individuals charged in connection with an insider trading scheme that prosecutors say netted them and others more than $1 million in profits.
Prosecutors say the IBM deal details came from an associate at the New York law firm that represented the computer giant. While not named, Cravath Swaine & Moore has said it was IBM's counsel in the deal.
At Thursday's hearing, Weishaus said that after a friend also working at his firm gave him the tip, he bought SPSS call options and made a profit following the deal's announcement on July 28, 2009.
Prosecutors say the friend was Thomas Conradt, who himself traded in SPSS ahead of the deal's announcement based on tips from his roommate, Trent Martin, an Australian financial analyst.
Condradt, like Weishaus, worked at Euro Pacific, while Martin at the time of the trading worked at Royal Bank of Scotland Group plc (RBS.L), according to Financial Industry Regulatory Authority records.
Both Condradt and Martin earlier this year pleaded guilty to charges stemming from the insider trading probe.
U.S. District Judge Andrew Carter set Weishaus's sentencing for April 25. Weishaus, a resident of Baltimore, faces a maximum of 25 years in prison.
The case is U.S. v. Conradt et al, U.S. District Court, Southern District of New York, No. 12-cr-00887. (Reporting by Nate Raymond in New York; Editing by Leslie Adler)