NEW YORK (Reuters) - A former analyst at the investment fund of Dell Inc founder Michael Dell was arrested on Monday after he refused to show up for trial to face charges that he made $1.5 million engaging in insider trading.
U.S. District Judge Paul Engelmayer in Manhattan earlier in the day issued a bench warrant for John Afriyie, a former employee of MSD Capital, after a defense lawyer said his client was in New Jersey and would not agree to come to court.
Engelmayer warned that Afriyie was “going to need to bring his toothbrush.” And after Afriyie was arrested about five hours later at a hotel in East Windsor, New Jersey, and was brought into the court in chains, the judge revoked his bail.
“Actions speak louder than words,” Engelmayer said. “Mr. Afriyie, your actions today require that you be detained.”
Ezra Spilke, one of Afriyie’s lawyers, told the judge that his client’s failure to appear arose from a “misguided attempt to fire his counsel” and a misunderstanding about the state of the case.
But after hearing from Afiyie behind closed doors, Engelmayer said he had given “wilfully untrue” reasons for not appearing for trial. He denied Afriyie’s request for new lawyers, clearing the way for the trial to begin on Tuesday.
Afriyie, 29, had been free on a $200,000 bond since he was first arrested last April in what was one of the latest insider trading cases to be announced by Manhattan U.S. Attorney Preet Bharara’s office.
Prosecutors said that in early 2016, Afriyie learned about plans by Apollo Global Management LLC to acquire security company ADT Corp after the private equity firm approached MSD to discuss providing debt financing for the deal.
After he and other MSD employees were emailed about a restriction imposed on trading in ADT stock, Afriyie accessed a shared folder on MSD’s network server and obtained information about Apollo’s pending deal, prosecutors said.
He then bought ADT call options for $24,254 through a brokerage account in his mother’s name, enabling him to earn $1.53 million when the transaction was announced, prosecutors said.
Afriyie has pleaded not guilty to charges of securities fraud and wire fraud.
The case is U.S. v. Afriyie, U.S. District Court, Southern District of New York, No. 16-cr-337.
Reporting by Nate Raymond in New York; Editing by Tom Brown, Leslie Adler and Bernard Orr