The Securities and Exchange Commission today charged a former global consulting firm executive and his friend a filmmaker/actor with the non-crime of insider trading.
The SEC alleges that Scott Allen learned confidential information in advance of the acquisitions of Millennium Pharmaceuticals Inc. and Sepracor Inc. through his work at a global consulting firm that was advising the acquiring Japanese companies as they made cash tender offers. Allen allegedly tipped his longtime friend John Michael Bennett, an independent filmmaker/actor who had previously worked at a Wall Street investment bank.. On the basis of the nonpublic information, Bennett purchased thousands of dollars in call options in the companies and also tipped his business partner at the independent film company they co-own. The insider trading by Bennett and his tippee generated more than $2.6 million in illicit profits. Allen received cash from Bennett in exchange for the tips.
In a parallel action, the U.S. Attorney's Office for the Southern District of New York today announced the unsealing of criminal charges against Allen and Bennett.
Bennett also has produced Standing Silent, The Betrayed and Coming and Going.
Quick quiz: what do you call it when you're the head of a big bank and the government tells you it's going to bail you and your friends out, and then you make deals and trade securities based on that knowledge?
ReplyDeleteIf you answered, "insider trading", there is something wrong with you.