Securities Fraud Expert Witnesses & Insider Trading Scam

What matters may securities fraud expert witnesses review and consult on?  These experts may examine and advise on Ponzi schemes, insider trading, securities offerings, unauthorized trading, churning, and more. Michael Lucarelli, formerly of Lippert/Heilshorn & Associates, was arrested and charged with insider trading on August 26th. He is facing criminal charges by the FBI as well as civil proceedings by the SEC. SEC press release 2014-175 describes the SEC’s investigation and findings.

The Securities and Exchange Commission today charged a director of market intelligence at a Manhattan-based investor relations firm with insider trading ahead of impending news announcements by more than a dozen clients.  The charges were filed against Michael Anthony Dupre Lucarelli, who garnered nearly $1 million in illicit profits.

An SEC investigation and ongoing forensic analysis of Lucarelli’s work computers uncovered that he repeatedly accessed clients’ draft press releases stored on his firm’s computer network prior to public announcements.  The SEC alleges that Lucarelli, who had no legitimate work-related reason to access the draft press releases, routinely purchased stock or call options in advance of favorable news and sold short or bought put options ahead of unfavorable news.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Lucarelli…

According to the SEC’s complaint filed in federal court in Manhattan, Lucarelli traded in securities belonging to companies that his firm was advising in advance of announcing their earnings or other significant events such as a merger or clinical drug trial result.  Lucarelli began taking a position in a client’s securities in the days immediately preceding the announcement, although in a few instances he began making his purchases weeks in advance.  Lucarelli started divesting himself of his position immediately after the announcement in order to reap instant profits.

The SEC further alleges that Lucarelli attempted to hide his illicit behavior by lying to brokerage firms where he set up his trading accounts.  Lucarelli purposely omitted listing his investor relations firm employment on account-opening applications and instead falsely stated that he was self-employed or retired.

 

About Karen Olson

Information Professional with twenty years experience in legal, public record, and business research. Fifteen years law firm experience.

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