Call it a cautionary tale for young corporate lawyers who might be inclined to discuss their work in what they think is an innocent fashion.
On Thursday, federal prosecutors in Manhattan charged two former stockbrokers, Thomas Conradt of Denver and David Weishaus of Baltimore, with running an insider trading scheme that yielded more than $1 million in illicit profits based on confidential information about International Business Machines’s $1.2 billion acquisition of analytics software maker SPSS in 2009.
In addition to criminal charges filed by the Justice Department, Conradt and Weishaus also face civil charges brought by the SEC. The two worked together in the Manhattan office of Westport, Connecticut–based broker-dealer Euro Pacific Capital and were also once law school classmates at the University of Baltimore. The Justice Department and SEC both state in court filings that the inside information the two men traded on originated with an attorney working on the IBM side of the SPSS acquisition.
The civil complaint states that IBM’s outside law firm was retained to work on a potential deal for SPSS in January 2009, that IBM subsequently made a nonbinding offer to SPSS in April, and that the two companies entered into a “supplemental agreement” in late May.