Criminal Authorities File Charges Against Defendant in SEC Insider Trading Case
According to the U.S. Attorney’s Office in Massachusetts, Robert H. Bray (“Bray”) was arrested by the FBI in November 2014 and charged with participating in an insider trading conspiracy for his transactions in Wainwright Bank & Trust Company (“Wainwright”) stock based on information he received from J. Patrick O’Neill (“O’Neill”).
Allegedly, O’Neill learned through his position as a senior vice president at Eastern Bank Corporation (“Eastern Bank”) of the intended acquisition of Wainwright. Bray and O’Neill golfed and socialized at the same country club. After learning from O’Neill about the pending acquisition, Bray purchased 31,000 Wainwright shares. Bray had never previously purchased Wainright securities. When Eastern Bank publicly announced the acquisition, Wainwright’s stock price increased by about ninety-four percent. In the following months, Bray sold all of his Wainright securities generating nearly $300,000 in profits.
A few months after the transactions, the Security and Exchange Commission (“SEC”) began seeking information from Eastern Bank about trades in Wainwright stock. O’Neill quit his job at Eastern Bank and did not respond to the SEC inquiry. The SEC then subpoenaed both O’Neil and Bray to testify in the SEC’s investigation. Both men asserted their Fifth Amendment privilege against self-incrimination for all questions addressed to them.
The SEC filed civil charges against Bray and O’Neill on August 18, 2013 for violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. This pending SEC action seeks injunctions against each of the defendants from further violations of the securities law, discouragement of profits with interest, and additional civil penalties of up to three times the defendants’ gains. The SEC press release for this case can be found here. The civil complaint for this case may be found on the DU Corporate Governance website.
In addition, on October 31, 2014, the United States Attorney’s Office of the District of Massachusetts charged O’Neill with the one count of conspiracy to commit securities fraud. The FBI press release for this case can be found here.