Boston - A resident of Ludlow was convicted today on charges related to insider trading.
Following a jury trial before United States District Judge Michael A. Ponsor, Carl E. Binette, 31, was convicted of seven counts of conspiracy, securities fraud and false statements.
In April 2008, Binette’s uncle and co-conspirator, Peter Talbot, who was then employed by the Hartford Investment Management Company (HIMCO), determined through confidential information he obtained during his employment, that the insurance company Safeco Corp. was a potential acquisition target of HIMCO’s parent company, the Hartford Financial Services Group, Inc. Talbot tipped off Binette regarding Safeco’s status as a potential acquisition target, and the two set up an online brokerage account in Binette’s name to buy Safeco securities, primarily Safeco call options, beginning on April 17, 2008 and lasting until April 22, 2008. Talbot and Binette established substantial positions in Safeco securities during this time, and after Safeco’s acquisition by Liberty Mutual on April 23, 2008, Talbot and Binette sold off all of the Safeco securities for a profit of more than $615,000. On Jan. 9, 2012, Talbot pleaded guilty to conspiracy and securities fraud in connection with these activities.
In May 2008, after the United States Securities and Exchange Commission commenced an investigation into Binette's trading activities, Binette, during a telephone call with three SEC attorneys, made several false statements regarding whether he had spoken to anyone prior to engaging in the trading of Safeco securities, and what had led him to make his investment. Binette persistently denied speaking to anyone before engaging in these trades, despite the fact that his trading was based on the tip he received from Talbot. Furthermore, Binette falsely stated that his purchases of Safeco securities had been based on Internet research he had done as well as a dream he had in which a deceased relative appeared to him and said that she was “safe,” thereby ostensibly prompting his investment in Safeco.
Sentencing is scheduled for February 26, 2013. Binette faces up to five years in prison and a fine of over $1.2 million for the conspiracy count; 20 years in prison and a fine of $5 million for each count of securities fraud; and five years in prison and a fine of over $1.2 million for the false statements count, to be followed by three years of supervised release.
United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation Boston Field Division, made the announcement today. The U.S. Attorney’s Office is also appreciative of the assistance provided by the Miami Regional Office of the United States Securities and Exchange Commission. The case is being prosecuted by Assistant U.S. Attorney Vassili Thomadakis of Ortiz’s Economic Crimes Unit and Assistant U.S. Attorney Amy Harman Burkart of Ortiz’s Cybercrime Unit.
Following a jury trial before United States District Judge Michael A. Ponsor, Carl E. Binette, 31, was convicted of seven counts of conspiracy, securities fraud and false statements.
In April 2008, Binette’s uncle and co-conspirator, Peter Talbot, who was then employed by the Hartford Investment Management Company (HIMCO), determined through confidential information he obtained during his employment, that the insurance company Safeco Corp. was a potential acquisition target of HIMCO’s parent company, the Hartford Financial Services Group, Inc. Talbot tipped off Binette regarding Safeco’s status as a potential acquisition target, and the two set up an online brokerage account in Binette’s name to buy Safeco securities, primarily Safeco call options, beginning on April 17, 2008 and lasting until April 22, 2008. Talbot and Binette established substantial positions in Safeco securities during this time, and after Safeco’s acquisition by Liberty Mutual on April 23, 2008, Talbot and Binette sold off all of the Safeco securities for a profit of more than $615,000. On Jan. 9, 2012, Talbot pleaded guilty to conspiracy and securities fraud in connection with these activities.
In May 2008, after the United States Securities and Exchange Commission commenced an investigation into Binette's trading activities, Binette, during a telephone call with three SEC attorneys, made several false statements regarding whether he had spoken to anyone prior to engaging in the trading of Safeco securities, and what had led him to make his investment. Binette persistently denied speaking to anyone before engaging in these trades, despite the fact that his trading was based on the tip he received from Talbot. Furthermore, Binette falsely stated that his purchases of Safeco securities had been based on Internet research he had done as well as a dream he had in which a deceased relative appeared to him and said that she was “safe,” thereby ostensibly prompting his investment in Safeco.
Sentencing is scheduled for February 26, 2013. Binette faces up to five years in prison and a fine of over $1.2 million for the conspiracy count; 20 years in prison and a fine of $5 million for each count of securities fraud; and five years in prison and a fine of over $1.2 million for the false statements count, to be followed by three years of supervised release.
United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation Boston Field Division, made the announcement today. The U.S. Attorney’s Office is also appreciative of the assistance provided by the Miami Regional Office of the United States Securities and Exchange Commission. The case is being prosecuted by Assistant U.S. Attorney Vassili Thomadakis of Ortiz’s Economic Crimes Unit and Assistant U.S. Attorney Amy Harman Burkart of Ortiz’s Cybercrime Unit.
