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Attorney Pleads Guilty in Manhattan Federal Court to Involvement in Insider Trading Ring

U.S. Attorney’s Office December 10, 2009
  • Southern District of New York (212) 637-2600

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 Office of the Federal Bureau of Investigation ("FBI"), announced that BRIEN SANTARLAS, a former attorney at Ropes & Gray LLP, pleaded guilty today to insider trading charges in Manhattan federal court. The charges against SANTARLAS arose out of an ongoing investigation of insider trading at hedge funds and stock trading firms which has already led to charges against 20 Wall Street professionals, five of whom have pleaded guilty and are cooperating with the government.

According to the two-count Information filed against SANTARLAS, other documents in this case, and statements made during the guilty plea proceeding before United States Magistrate Judge ANDREW J. PECK:

From June 2007 through May 2008, SANTARLAS conspired with others to steal material, nonpublic information ("Inside Information") from the law firm of Ropes & Gray for the purpose of buying and selling securities. In violation of his duty of confidentiality to the law firm and its clients, as well as Ropes & Gray's written policies and procedures, SANTARLAS stole Inside Information about several mergers and acquisitions of public companies for which Ropes & Gray was providing legal services, prior to the public announcements of the deals. Specifically, SANTARLAS stole Inside Information about the acquisitions of 3Com Corporation and Axcan Pharma, Inc., and provided it to his coconspirators in exchange for thousands of dollars in cash payments. As a result of trading that was based on the Inside Information provided by SANTARLAS and his co-conspirators, other individuals collectively made millions of dollars in illegal profits.

SANTARLAS, 33, of Hoboken, New Jersey, pleaded guilty today to one count of conspiracy to commit securities fraud and one substantive count of securities fraud. The conspiracy charge carries a maximum sentence of five years in prison and a maximum fine of the greater of $250,000, or twice the gross gain or gross loss from the offense. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense.

Mr. BHARARA praised the work of the FBI and thanked the United States Securities and Exchange Commission for its assistance in the investigation. Mr. BHARARA also thanked Ropes & Gray for its cooperation and assistance in this matter.

Assistant United States Attorneys ANDREW L. FISH, REED M. BRODSKY, and MARC LITT are in charge of the prosecution.

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