Former New York analyst charged with insider trading on ADT deal

NEW YORK (Reuters) - A former analyst at a New York investment fund was arrested on Wednesday on charges that he made approximately $1.5 million trading on inside information about Apollo Global Management’s nearly $7 billion deal for security company ADT Corp.

John Afriyie, 28, was charged in a criminal complaint filed in Manhattan federal court for allegedly trading on confidential details about the deal while working at the fund, which was approached about providing debt financing for the deal.

“His profits were not the result of trading acumen, diligent research, or blind luck, but rather the alleged spoils of criminal insider trading,” Manhattan U.S. Attorney Preet Bharara said in a statement.

The complaint did not identify Afriyie’s ex-employer. A LinkedIn profile of a John Afriyie said he worked at MSD Capital, the investment fund of Dell Inc founder Michael Dell. An email to Afriyie’s account at MSD said he “no longer works” there.

A spokesman for MSD Capital did not respond to requests for comment. A court-appointed lawyer for Afriyie, who was released on a $200,000 bond, also did not respond to requests for comment.

The case was the latest insider trading case to be announced by Bharara, whose office since 2009 has secured convictions of 76 people for engaging in the offense.

Prosecutors said that from Jan. 28 to Feb. 12, Afriyie bought call options for U.S. security company ADT for more than $24,250 through a brokerage account in the name of his mother.

Those trades began after he and other hedge fund employees were emailed about a restriction imposed on trading securities for an unnamed provider of alarm monitoring services after Apollo approached the fund about financing, the complaint said.

Prosecutors said Afriyie also accessed confidential information about Apollo’s pending acquisition of ADT in an electronic shared drive folder on the fund’s network server.

When Apollo’s acquisition of ADT was publicly announced on Feb. 16, ADT shares jumped, enabling Afriyie to earn at least $1.53 million in profits, prosecutors said.

The case is U.S. v. Afriyie, U.S. District Court, Southern District of New York, No. 16-mj-02423.

Reporting by Nate Raymond in New York; Editing by Leslie Adler