Federal prosecutors last week drew another guilty plea in an insider trading case based on alleged tips from a Bank of America employee on pending corporate transactions, including Abbott‘s (NYSE:ABT) $25 billion acquisition of St. Jude Medical.
In August 2017, U.S. authorities accused seven individuals of reaping more than $5 million in illicit profits based on tips from Bank of America technical consultant Daniel Rivas. All but one pleaded guilty, with the sixth coming August 7 when Roberto Rodriguez copping to charges of conspiracy to commit securities fraud and fraud in connection with a tender offer, according to the office of the U.S. district attorney for southern New York. The seventh, Michael Siva, pleaded not guilty in September 2017.
Prosecutors said that Rivas and Rodriguez, childhood friends, conspired to trade on confidential information and colluded with a third man, Rodolfo Sablon, to create an investment fund using proceeds from the inside trades with an ownership stake going to Rivas. The scheme brought in some $2 million in illegal profits, according to prosecutors; in all, tips from Rivas led to about $5 million in illegal gains, they said.
Rodriguez faces up to five years in prison and fines of up to $250,000 or twice the gain from the offense when he’s sentenced by Judge Alison Nathan.