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 David Weishaus, 33, told a federal judge in Manhattan that he had
traded on a tip a friend got from his roommate that IBM had agreed
to buy Chicago-based software company SPSS Inc before the $1.2
billion deal was publicly announced.
"I know my conduct was wrong, and I apologize to the court and my
family, especially my mother and father," Weishaus said.
The plea came amid a crackdown on insider trading by New York
federal prosecutors, who since October 2009 have secured convictions
of 78 people. On Wednesday a jury convicted Michael Steinberg, a
portfolio manager at Steven A. Cohen's SAC Capital Advisors accused
of insider trading.
Weishaus, whose case is unrelated to Steinberg's, was first indicted
in November 2012 and faced a January 21 trial date. He pleaded
guilty to one count of conspiracy to commit securities fraud and one
count of securities fraud.
The plea is subject to a cooperation agreement. In a statement,
Preet Bharara, the Manhattan U.S. attorney, said the investigation
is continuing. The indictment mentions two unnamed co-conspirators
who also traded ahead of the IBM deal.
Weishaus, a former employee at Westport, Connecticut-based Euro
Pacific Capital Inc, was the last of three individuals charged in
connection with an insider trading scheme that prosecutors say
netted them and others more than $1 million in profits.
Prosecutors say the IBM deal details came from an associate at the
New York law firm that represented the computer giant. While not
named, Cravath Swaine & Moore has said it was IBM's counsel in the
deal.
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At Thursday's hearing, Weishaus said that after a friend also
working at his firm gave him the tip, he bought SPSS call options
and made a profit following the deal's announcement on July 28,
2009.
Prosecutors say the friend was Thomas Conradt, who himself traded in
SPSS ahead of the deal's announcement based on tips from his
roommate, Trent Martin, an Australian financial analyst.
Condradt, like Weishaus, worked at Euro Pacific, while Martin at the
time of the trading worked at Royal Bank of Scotland Group plc <RBS.L>,
according to Financial Industry Regulatory Authority records.
Both Condradt and Martin earlier this year pleaded guilty to charges
stemming from the insider trading probe.
U.S. District Judge Andrew Carter set Weishaus's sentencing for
April 25. Weishaus, a resident of Baltimore, faces a maximum of 25
years in prison.
The case is U.S. v. Conradt et al, U.S. District Court, Southern
District of New York, No. 12-cr-00887.
(Reporting by Nate Raymond in New York;
editing by Leslie Adler)
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