Brooklyn man pleads guilty to insider trading and tax evasion | USAO-EDNY


Jason Peltz pleaded guilty today in federal court in Brooklyn to securities fraud and tax evasion in an insider trading scheme in which Peltz executed securities trades based on material information Non-Public Information (MNPI) from a company insider. The proceedings took place before U.S. District Judge Nicholas G. Garaufis. Once convicted, Peltz faces up to 25 years in prison, forfeiture of his ill-gotten gains and restitution to the Internal Revenue Service (IRS) of more than $1 million.

Breon Peace, United States Attorney for the Eastern District of New York, Michael J. Driscoll, Deputy Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Thomas Fattorusso, Special Agent in Charge, IRS Criminal Investigation, New York (IRS-CI), announced the guilty plea.

“With today’s plea, Peltz admitted to trading non-public material information about a publicly traded company to line his own pockets and also to lying about his earnings to avoid paying taxes on a substantial tax debt” , the U.S. peace attorney said. “This office will vigorously pursue traders who seek to cheat the system, harm the investing public, and undermine the integrity of our financial markets. We will hold accountable those who lie to avoid paying their fair share of taxes.

Mr. Peace thanked the Securities and Exchange Commission, New York Regional Office, for its assistance during the investigation.

“Clear and simple. It is illegal to use non-public information to buy and sell stocks. This manipulates the markets and can have detrimental effects on the wallets of people who play by the rules. But this defendant didn’t stop there, he made significant financial gains and then claimed he had no income in an effort to blatantly evade taxes,” the special agent said in charge of IRS-CI, Fattorusso.

In February 2016, Peltz obtained MNPI from an insider of Ferro Corporation (“Ferro”) regarding a potential tender offer (the “Ferro Tender Offer”). Peltz used this MNPI to:

  • Profitably trade Ferro in the brokerage accounts of two co-conspirators,
  • Tipping others, each of whom also traded profitably on MNPI over Ferro’s takeover bid, and
  • Tip a journalist, who wrote an article publicizing the news of Ferro’s takeover bid, which caused Ferro’s share price to rise.

Peltz and the Ferro insider each received significant financial benefits from other co-conspirators shortly after Peltz switched the brokerage accounts of those co-conspirators, and Peltz continued to receive significant payments from the co-conspirators. conspirators, as well as other benefits, as payment for his business activity. Peltz ordered that these payments be made to company and agent bank and credit card accounts, in order to conceal his earnings from the IRS. Despite receiving those payments, in 2017 Peltz falsely swore under penalty of perjury to the IRS that he had been unemployed since December 2015 and had no income.

The government’s case is being handled by the Bureau’s Corporate and Securities Fraud Section. Assistant United States Attorneys Kaitlin T. Farrell, Sarah M. Evans and Special Assistant United States Attorney Barry O’Connell are leading the prosecution, with assistance from Assistant United States Attorney Brian Morris of the Office asset recovery section.

The defendant:

Age: 39
Brooklyn, New York

EDNY File No. 21-CR-154 (NGG)

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