Cross-County Insider Trading Scheme

<h2 class&equals;"node-title">Florida Man Admits Making Over &dollar;1&period;2 Million As Part Of Three Year&comma; Cross-County Insider Trading Scheme<&sol;h2>&NewLine;<p>TRENTON&comma; N&period;J&period; &&num;8211&semi; A professional day trader today admitted personally making more than &dollar;1&period;2 million in illicit profits by repeatedly trading on inside information divulged to him in violation of confidentiality agreements&comma; U&period;S&period; Attorney Paul J&period; Fishman announced&period;<&sol;p>&NewLine;<div class&equals;"mh-content-ad"><script async src&equals;"https&colon;&sol;&sol;pagead2&period;googlesyndication&period;com&sol;pagead&sol;js&sol;adsbygoogle&period;js&quest;client&equals;ca-pub-9162800720558968"&NewLine; crossorigin&equals;"anonymous"><&sol;script>&NewLine;<ins class&equals;"adsbygoogle"&NewLine; style&equals;"display&colon;block&semi; text-align&colon;center&semi;"&NewLine; data-ad-layout&equals;"in-article"&NewLine; data-ad-format&equals;"fluid"&NewLine; data-ad-client&equals;"ca-pub-9162800720558968"&NewLine; data-ad-slot&equals;"1081854981"><&sol;ins>&NewLine;<script>&NewLine; &lpar;adsbygoogle &equals; window&period;adsbygoogle &vert;&vert; &lbrack;&rsqb;&rpar;&period;push&lpar;&lbrace;&rcub;&rpar;&semi;&NewLine;<&sol;script><&sol;div>&NewLine;<p>Paul Petrello&comma; 54&comma; of Boca Raton&comma; Florida&comma; pleaded guilty before U&period;S&period; District Judge Michael A&period; Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit securities fraud and one count of securities fraud&period;<&sol;p>&NewLine;<p><strong>According to documents filed in this case and statements made in court&colon;<&sol;strong><&sol;p>&NewLine;<p><a href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;cross-county-insider-trading-scheme&sol;cross-county-insider-trading-scheme&sol;amp&sol;" rel&equals;"attachment wp-att-27328"><img class&equals;"alignright size-medium wp-image-27328" src&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;wp-content&sol;uploads&sol;2016&sol;02&sol;Cross-County-Insider-Trading-Scheme-336x237&period;jpg" alt&equals;"Cross-County Insider Trading Scheme" width&equals;"336" height&equals;"237" &sol;><&sol;a>On numerous occasions between May 2010 and August 2013&comma; Petrello and others&comma; using inside information obtained by Petrello’s friend and business associate&comma; Steven Fishoff&comma; 58&comma; of Westlake Village&comma; and Fishoff’s employees&comma; short sold securities of at least 13 public companies&period;<&sol;p>&NewLine;<p>For each of these offerings&comma; Fishoff or one or more of the day traders that he employed —including his friend&comma; Ronald Chernin&comma; 67&comma; of Oak Park&comma; California&comma; and his brother-in-law&comma; Steven Costantin&comma; 55&comma; of Farmingdale&comma; New Jersey — entered into confidentiality or &OpenCurlyDoubleQuote;wall-crossing” agreements as representatives of Fishoff’s trading entities&comma; whereby they agreed not to disclose or trade on inside information concerning the offerings and were &OpenCurlyDoubleQuote;brought over the wall” for the narrow purpose of determining whether to purchase the offered securities&period;<&sol;p>&NewLine;<p>In breach of the wall-crossing agreements&comma; Fishoff tipped Petrello about the confidentially marketed offerings by advising Petrello of the stock trading symbols of the companies&comma; as well as the timing and sometimes the pricing of the upcoming offerings&period; Fishoff generally provided Petrullo with the inside information in code&colon;  first&comma; text messaging Petrello only the first two letters of the company’s stock trading symbol&semi; and second&comma; calling Petrello and telling him the last two letters of the symbol&period;<&sol;p>&NewLine;<p>In addition&comma; Fishoff also directed Petrello to pass inside information related to the stock offerings to an individual identified as &OpenCurlyDoubleQuote;CC-1” in the information&period; At other times&comma; Fishoff directly tipped CC-1 about an upcoming offering&period;<&sol;p>&NewLine;<p>At Fishoff’s recommendation&comma; Petrello short sold the stock of the public companies in anticipation of a drop in the stocks’ price when the stock offerings were disclosed to the public&period; Petrello and his conspirators traded through the accounts of their respective trading entities or through related accounts that they controlled&period;<&sol;p>&NewLine;<p>By trading on the nonpublic information&comma; Petrello and his conspirators gained more than &dollar;3&period;9 million in profits over the course of the three-year scheme&comma; with Petrello personally making more than &dollar;1&period;2 million&period;  Petrello split his profits with Fishoff&comma; generally on a 50-50 basis&comma; as compensation for the inside information that Fishoff provided&period;<&sol;p>&NewLine;<p>The conspiracy count to which Petrello pleaded guilty carries a maximum potential penalty of five years in prison and a &dollar;250&comma;000 fine&period; The securities fraud count carries a maximum potential penalty of 20 years in prison and a &dollar;5 million fine&period; Sentencing is scheduled for May 25&comma; 2016&period;<&sol;p>&NewLine;<p>Fishoff has been indicted&comma; and Chernin and Costantin have been charged by complaint for their own involvement in the insider trading scheme&period; The charges and allegations contained in the indictment and complaint are merely accusations&comma; and defendants are presumed innocent unless and until proven guilty&period;<&sol;p>&NewLine;<p>U&period;S&period; Attorney Fishman credited special agents of the FBI&comma; under the direction of Acting Special Agent in Charge Andrew Campi in Newark&comma; for the investigation leading to today’s guilty plea&period;  He also thanked the U&period;S&period; Securities and Exchange Commission’s New York Regional Office under the direction of Sanjay Wadhwa&period;<&sol;p>&NewLine;<p>The government is represented by Assistant U&period;S&period; Attorney’s Shirley U&period; Emehelu and Nicholas P&period; Grippo of the Criminal Division of the U&period;S&period; Attorney’s Office in Newark&comma; as well as Acting Chief Barbara Ward and Assistant U&period;S&period; Attorney Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit&period;<&sol;p>&NewLine;<p>Today’s plea is part of efforts underway by President Obama’s <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;tag&sol;financial-fraud&sol;amp&sol;" title&equals;"Financial" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"519">Financial<&sol;a> Fraud Enforcement Task Force&period; The task force was established to wage an aggressive&comma; coordinated and proactive effort to investigate and prosecute financial crimes&period; With more than 20 federal agencies&comma; 94 U&period;S&period; attorneys’ offices&comma; and state and local partners&comma; it’s the broadest coalition of law enforcement&comma; investigatory and regulatory agencies ever assembled to combat fraud&period; Since its formation&comma; the task force has made great strides in facilitating increased investigation and prosecution of financial crimes&semi; enhancing coordination and cooperation among federal&comma; state and local authorities&semi; addressing discrimination in the lending and financial markets&semi; and conducting outreach to the public&comma; victims&comma; financial institutions and other organizations&period;  Since fiscal year 2009&comma; the Justice Department has filed over 18&comma;000 financial fraud cases against more than 25&comma;000 defendants&period;  For more information on the task force&comma; please visit <a href&equals;"http&colon;&sol;&sol;www&period;stopfraud&period;gov&sol;">www&period;StopFraud&period;gov<&sol;a><u>&period;<&sol;u><&sol;p>&NewLine;<p>Defense counsel&colon; David M&period; Rosenfield Esq&period; and Howard R&period; Elisofon Esq&period;&comma; New York<&sol;p>&NewLine;<p><a href&equals;"http&colon;&sol;&sol;www&period;justice&period;gov&sol;usao-nj&sol;pr&sol;florida-man-admits-making-over-12-million-part-three-year-cross-county-insider-trading">Original PressRelease &&num;8230&semi;<&sol;a><&sol;p>&NewLine;

Cross-CountyTrading Scheme