California Man Pleads Guilty To Insider Trading Scheme Based On Confidential Information Misappropriated From An Investment Bank

Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced that JEFFREY ROGIERS pled guilty today before United States District Judge Alison J. Nathan to conspiracy to commit securities fraud and fraud in connection with a tender offer for his role in an insider trading scheme relating to material nonpublic information misappropriated from an investment bank by Daniel Rivas, a former employee at the bank.  In August 2017, ROGIERS, as well as Michael Siva, Roberto Rodriguez, Rodolfo Sablon, and Jhonatan Zoquier, were arrested and charged in a 54-count Indictment for their involvement in three overlapping insider trading chains, all stemming from information misappropriated by Rivas.  Prior to the unsealing of the Indictment last year, Rivas and another participant in the scheme, James Moodhe, pled guilty and both have been cooperating with the Government in this investigation.  Since the unsealing of the Indictment, Sablon and Zoquier, in addition to ROGIERS, have pled guilty and will be sentenced by Judge Nathan.[1] 

U.S. Attorney Geoffrey S. Berman said:  “Jeffrey Rogiers traded on stolen confidential corporate information that he received, through a friend, from an insider at an investment bank in order to generate illicit profits.  Our Office and our law enforcement partners remain committed to identifying and prosecuting those who engage in such abuses of our nation’s securities markets.”

According to the allegations contained in the Indictment filed against ROGIERS and his co-conspirators, and statements made in related court filings and proceedings: 

The Investment Bank and Rivas

From August 2013 through May 2017, Rivas was employed as a technology consultant in the Research and Capital Markets Technology Group of an investment bank (the “Investment Bank”).  In this role, Rivas had access to an internal, proprietary system maintained by the Investment Bank (the “Deal Tracking System”) containing material nonpublic information (“Inside Information”) about potential and unannounced merger and acquisition transactions, including tender offers, involving the Investment Bank.  The Investment Bank’s written policies prohibited the unauthorized disclosure of confidential information, which included Inside Information.  Rivas had a duty, among other obligations, to maintain the confidentiality of all of the Investment Bank’s confidential information, including the Inside Information. 

Overview of the Insider Trading Schemes

From August 2014 through April 2017, Rivas violated the duties of confidentiality he owed to the Investment Bank by serially misappropriating material nonpublic information from the Investment Bank’s Deal Tracking System and passing that information along to friends so that they could utilize it to make profitable trades.  On more than 50 occasions between August 2014 and April 2017, Rivas provided Inside Information about contemplated but unannounced merger and acquisition (“M&A”) transactions and tender offer transactions involving clients and prospective clients of the Investment Bank to friends who used that information to purchase and sell securities.  In total, the insider trading based on the misappropriated Inside Information by Rivas resulted in illicit profits of more than $5 million through trading in more than two dozen securities.  The Inside Information was passed through three tipping chains.   

The Rogiers Tipping Chain

With respect to ROGIERS, Rivas passed inside information to his close friend Zoquier, who passed inside information to his close friend ROGIERS. 

From at least 2013 through August 2017, Rivas and Zoquier, who lives and works in New Jersey, had a close relationship.  ROGIERS lived and worked in California as a computer and network security analyst and had a close relationship with Zoquier.  In or about 2013, Zoquier introduced Rivas to ROGIERS.  In or about 2015, at Zoquier’s request, Rivas and ROGIERS met in person and Rivas explained to ROGIERS the nature of the Inside Information to which he had access.  Between at least in or about March 2016 and in or about April 2017, Rivas repeatedly provided Zoquier with Inside Information misappropriated from the Investment Bank so that Zoquier could execute profitable trades.  Beginning in approximately March 2016, Zoquier began sharing the Inside Information he received from Rivas with ROGIERS so that ROGIERS could execute profitable trades for himself.  Throughout the time that ROGIERS was obtaining Inside Information from Zoquier, ROGIERS understood that Rivas was the source of the Inside Information.  In addition to trading himself, ROGIERS also caused at least one other individual to execute profitable trades based on the Inside Information. 

In total, Zoquier and ROGIERS caused trades generating more than $200,000 in illicit profits based on Rivas’s Inside Information.

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ROGIERS, 34, of Oakland, California, pled guilty to one count of conspiracy to commit securities fraud and fraud in connection with a tender offer (Count Thirty-Nine of the Indictment), which carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain from the offense.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  ROGIERS will be sentenced before United States District Alison J. Nathan later this year. 

Sablon and Zoquier, two of the co-defendants named in the Indictment along with ROGIERS, have also pled guilty and will be sentenced by Judge Nathan.  Any trial of the remaining co-defendants, Siva and Rodriguez, will occur next year before Judge Nathan, on charges of conspiracy to commit securities fraud and fraud in connection with a tender offer, conspiracy to commit wire fraud, multiple counts of securities fraud, and tender offer fraud.  The allegations contained in the Indictment as to those defendants are merely accusations, and they are presumed innocent unless and until proven guilty.

Mr. Berman praised the investigative work of the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission for its assistance.  He added that the investigation is continuing.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant United States Attorneys Andrea M. Griswold and Samson Enzer are in charge of the prosecution.