Canadian Attorney Pleads Guilty in Manhattan Federal Court to Two Million Dollars in Insider Trading

PREET BHARARA, the United States Attorney for the Southern District of New York, and JOSEPH M. DEMAREST, JR., the Assistant Director-In-Charge of the New York Field Office of the Federal Bureau Of Investigation ("FBI"), announced that STANKO GRMOVSEK, 40, of Ontario, Canada, pleaded guilty today in Manhattan federal court to participating in an insider trading scheme which netted more than $2 million in profits. The Southern District of New York case charging insider trading on the United States-based stock exchanges stems from charges announced by the Royal Canadian Mounted Police in the largest criminal insider trading case in Canada's history. According to the Information filed in this case and statements made during the guilty plea proceeding before United States District Judge NAOMI REICE BUCHWALD:

GRMOVSEK's friend and law school classmate ("CC-1") was a partner in the Toronto office of Dorsey & Whitney ("Dorsey"), a Minneapolis-based law firm with offices throughout the United States and the world. CC-1 represented companies in the United States and abroad, including companies engaged in or contemplating mergers, acquisitions, and other business combinations.

From 2006 through February 2008, CC-1 misappropriated material, non-public information from Dorsey & Whitney and various of its clients (the "Dorsey Inside Information"). Based on his access to information about various Dorsey & Whitney clients, CC-1 obtained confidential, material, nonpublic information about at least nine acquisitions and passed the information on to GRMOVSEK. GRMOVSEK then used that information to trade in the securities of the acquired companies on United States and Canadian-based exchanges.

From 2006 through February 2008, GRMOVSEK traded based on the following Dorsey Inside Information that had been provided by CC-1: (a) the proposed acquisition by Medrad, Inc., of Possis Medical, Inc., (b) the proposed acquisition by Terex Corporation of ASV, Inc., (c) the proposed acquisition by Yamana Gold of Desert Sun Mining Corp., (d) the proposed acquisition by Yamana Gold of Viceroy Exploration, Ltd., (e) the proposed acquisition by Goldcorp of Glamis Gold, Ltd., (f) the proposed acquisition by Elara Holdings, Inc., of Direct General Corp., (g) the reported business combination of Eldorado Gold Corp. and Centerra Gold Corp., (h) the reported potential acquisition by Uranium One, Inc., of Energy Metals Corp., and (i) the proposed acquisition by Chinalco of Peru Copper, Inc. All of these trades occurred on United States-based exchanges, including the American Stock Exchange and the New York Stock Exchange.

As a result, GRMOVSEK earned for himself and for CC-1 a total of over $2 million in illegal profits from the insider trading on the United States-based exchanges.

At today's proceeding, GRMOVSEK pleaded guilty to one count of conspiring to commit securities fraud. GRMOVSEK also separately pleaded guilty today in the Ontario Court of Justice in Toronto, Canada, to charges stemming from his insider trading activity with CC-1.

GRMOVSEK is scheduled to be sentenced by Judge BUCHWALD on November 23, 2009. He faces a maximum sentence of 5 years in prison.

Mr. BHARARA praised the work of the FBI, the United States Securities and Exchange Commission, the Ontario Securities Commission, the Royal Canadian Mounted Police, Integrated Market Enforcement Team, and the Ministry of the Attorney General (Ontario) Stock Fraud and Criminal Asset Forfeiture Units.

Assistant United States Attorney RAY LOHIER is in charge of the prosecution.