U.S. Attorney's Office
Middle District of Louisiana
(225) 389-0443
March 5, 2015

Third Louisiana Resident Indicted for Insider Trading in Connection with the Acquisition of the Shaw Group

BATON ROUGE, LA—United States Attorney Walt Green of the Middle District of Louisiana and Stephanie Finley of the Western District of Louisiana jointly announced that another individual has been charged with insider trading in connection with the acquisition of the Shaw Group. A federal grand jury sitting in the Western District of Louisiana has indicted BILLY J. ADCOX, JR, age 44, of Ruston, Louisiana, with conspiracy to commit securities fraud (insider trading), in violation of Title 18, United States Code, Section 371, and securities fraud (insider trading), in violation of Title 15, United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-1. If convicted, ADCOX faces significant incarceration, fines, restitution, and supervised release following imprisonment.

The Indictment alleges that from in or before July 2012, and continuing to at least December 2012, ADCOX, his close friend Jesse Roberts, along with John Doe, engaged in a scheme to profit from inside information about the upcoming merger between The Shaw Group (“Shaw”) and Chicago Bridge and Iron Company (“CB&I”).

According to the allegations contained in the Indictment, which was returned by the grand jury yesterday, in mid-2012, Shaw was considering a potential merger opportunity. At the time, Zeringue was the Vice President of Construction Operations for Shaw’s Plant Services Division. In late July 2012, Shaw and CB&I came to an agreement whereby CB&I acquired all outstanding shares of Shaw stock. The merger between the two companies was publicly announced on July 30, 2012 (“the public announcement”). As a result of the public announcement, Shaw’s stock price rose substantially.

The Indictment alleges that, prior to the public announcement and through his job at Shaw, Zeringue obtained inside information about the upcoming merger between Shaw and CB&I and passed the inside information to Roberts. The Indictment further alleges that Roberts subsequently passed the inside information to ADCOX, who, in turn, passed the inside information to John Doe and facilitated contact between Roberts and John Doe. Thereafter, ADCOX and John Doe allegedly purchased Shaw securities before the public announcement and sold their Shaw securities after the public announcement had caused Shaw’s stock price to rise, all at the expense of Shaw shareholders and potential Shaw shareholders who were not privy to the inside information. The Indictment also alleges that ADCOX made over $37,000 in proceeds from his illegal insider trading activities.

Prior to the Indictment announced today, Zeringue was charged in the Middle District of Louisiana with conspiracy to commit securities fraud. On June 27, 2014, Zeringue pled guilty as charged pursuant to a plea agreement with the United States.

Roberts, age 43, of Ruston, Louisiana, has also been charged with insider trading as part of the investigation. On Thursday, February 19, 2015, a federal grand jury sitting in the Middle District of Louisiana indicted Roberts, charging him with conspiracy to commit securities fraud (insider trading), in violation of Title 18, United States Code, Section 371, and securities fraud (insider trading), in violation of Title 15, United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-1.

In announcing the Indictment, U.S. Attorneys Green and Finley praised the investigative work of the U.S. Secret Service, the Federal Bureau of Investigation, and the Internal Revenue Service-Criminal Investigation, and thanked the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority for their assistance.

This matter is being handled by the U.S. Attorney’s Offices for the Middle and Western Districts of Louisiana and the Baton Rouge offices of the FBI, Secret Service, and IRS-Criminal Investigation. It is being prosecuted by Assistant United States Attorneys Chris Dippel and Patricia Jones of the Middle District of Louisiana and Assistant United States Attorney Seth Reeg of the Western District of Louisiana.

NOTE: An indictment is an accusation by the Grand Jury. A defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.

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