Jason Peltz charged with insider trading scheme in NY

Rick Steves

Mr. Peltz regularly used his relationship with the reporter to trade shortly before the publication of his articles about publicly traded companies, which were often followed by increases in the prices of the companies’ stock.

Jason Peltz was charged by the U.S. Attorney’s Office Eastern District of New York with securities fraud, money laundering, and tax evasion, among other offenses.

The charges arise out of a long-running insider trading scheme. Mr. Peltz allegedly executed securities transactions in the brokerage accounts of co-conspirators based on material nonpublic information.

Peltz was arrested on a complaint in December 2020 and will be arraigned on the indictment at a later date.

Mark J. Lesko, Acting United States Attorney for the Eastern District of New York, said: “As alleged, Peltz used material nonpublic information about publicly traded companies to line his own pockets and then concealed his illegally earned income to avoid paying taxes.

“This Office will spare no effort to identify and prosecute defendants who seek to profit from insider trading schemes that harm the investing public and undermine the integrity of our financial markets.”

Exploiting nonpublic information for a competitive edge in stock and options trading is illegal. Mr. Peltz has allegedly rigged the system for his personal gain, creating fortune for himself at the expense of others.

Accused of a multitude of crimes that go far beyond his initial investments, he’s also accused of tax crimes and lying.

Between 2015 and 2020, Mr. Peltz and his co-conspirators obtained non-public information about publicly traded companies from a variety of sources, including a corporate insider and a reporter at a financial news organization.

This allowed them to profitably trade in securities in advance of public disclosure through news articles, including announcements of potential mergers or acquisitions that sometimes resulted in near-immediate increases in the companies’ share prices.

Mr. Peltz and his co-conspirators often communicated via the use of smartphone applications with end-to-end encryption and also used prepaid cellular telephones to prevent scrutiny of his communications, the official statement said.

An example was the insider information obtained about Ferro Corporation in February 2016 about a potential takeover offer. Mr. Peltz used that MNPI to profitably trade in Ferro in the brokerage accounts of two co-conspirators, tip certain other co-conspirators, each of whom also profitably traded on MNPI about the Ferro Takeover Bid, and tip the Reporter, who wrote an article making public the news of the Ferro Takeover Bid, which resulted in an increase in the price of Ferro’s stock.

Mr. Peltz regularly used his relationship with the reporter to trade shortly before the publication of his articles about publicly traded companies, which were often followed by increases in the prices of the companies’ stock.

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted of securities fraud, Peltz faces up to 25 years’ imprisonment.

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