A former Wells Fargo & Co. investment banker is among nine people charged with taking part in an insider-trading conspiracy that brought in $11 million in illegal gains from tips on pending mergers.
John Femenia, 31, is accused of misusing his position at Wells Fargo Securities LLC to get information about transactions involving the firm’s clients and turning the data over to others in exchange for kickbacks of cash and gold, according to an indictment unsealed Thursday in federal court in Charlotte, North Carolina. Six of those charged will plead guilty, the Justice Department said in an e-mailed statement.
Femenia worked in Wells Fargo’s Charlotte office when most of the alleged activity occurred and later in New York, where he lives now, according to the U.S. Securities and Exchange Commission, which filed a civil case against him in Charlotte on Dec. 5. He was arrested Thursday in New York, according to the government.
From March 2010 until December, “the defendants and others were members of an insider trading conspiracy that stole material nonpublic information, including information about upcoming corporate mergers and acquisitions, from Wells Fargo and its clients,” according to the indictment.
Mary Eshet, a Wells Fargo spokeswoman, didn’t immediately respond to an e-mail message seeking comment. Wells Fargo, the biggest U.S. home lender, is based in San Francisco.
Femenia tipped friends, according to the indictment. The tips were then spread to other friends and family members in five states, according to the government.
The case is U.S. v. Femenia, 12-cr-00386, U.S. District Court, Western District of North Carolina (Charlotte).
© Copyright 2014 Bloomberg News. All rights reserved.