Now in Legal Rebels:
Posted Nov 30, 2012 01:09 pm CST
A Colorado lawyer and his former law school classmate have been charged with insider trading after allegedly acting on a tip that IBM was preparing to buy software maker SPSS Inc.
Denver lawyer Thomas Conradt and former classmate David Weishaus of Baltimore are charged based on trades made in 2009 while they were working as stock brokers in the Manhattan offices of Euro Pacific Capital, report the Wall Street Journal Law Blog, Reuters and the Denver Post. Conradt obtained a Maryland law license in 2011 and a Colorado law license this year.
The indictment and a civil suit (PDF) filed by the Securities and Exchange Commission against the men do not identify the law school, nor the law firm associate who passed along the information to a mutual friend. However, Cravath Swaine & Moore has previously said it represented IBM in the transaction, Reuters says. The SEC complaint says the associate talked about the deal because he was concerned about the assignment and wanted “moral support, reassurance and advice.” He expected his friend to keep the details confidential and never traded on the information.
Conradt is accused of making more than $2,500 on the trades, and Weishaus is accused of making more than $127,000. Weishaus is also accused of tipping three unindicted co-conspirators who collectively earned nearly $900,000.
The government refers to instant messages between the defendants, including this alleged exchange:
Conradt: “we gotta keep this in the family”
Weishaus: “dude, no way i don’t want to go to jail f*** that”
Conradt: “jesus christ”
Weishaus: “martha stewart spent 5 months in the slammer”
Conradt: “does [a friend] know?”
Weishaus: “and they tried to f*** the mavericks owner”