by T. GormanPosted on Posted in SECActions

The war on insider trading continues in the wake of the guilty verdicts in the criminal case against former Goldman Sachs director Rajat Gupta. This week another defendant pleaded guilty in the expert networking insider trading cases. Alnoor Ebrahim pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud in connection with the insider trading scheme. U.S. v. Ebrahim, 1:12-cr-00471(S.D.N.Y.). Sentencing is scheduled for October 25, 2012.

Mr. Ebrahim was previously employed as an associate director of channel marketing at AT&T. According to the information, from 2008 through 2010 Mr. Ebrahim furnished product sales information regarding AT&T’s cell phone handsets. This included information about the sales of IPhone and RIM’s Blackberry devices. That information was made available to clients of expert network Primary Global which was central to this series of insider trading cases. In many instances the information was made available in consultation calls with employees of investment firms in New York City. Mr. Ebrahim was paid about $180,000.

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by T. GormanPosted on Posted in SECActions

Data Systems & Solutions LLC of Reston, Virginia settled FCPA charges with the DOJ, entering into a two year deferred prosecution agreement under which the firm will periodically report to the Department. The underlying two count information contains one count of conspiracy and one count of FCPA violations. The firm will pay a criminal fine of $8.82 million. U.S. v. Data Systems & Solutions LLC, Cr. No. 1:12-CR-262 (E.D. Va. Filed June 18, 2012).

Data Systems designs, installs and maintains instrumentation and control systems at nuclear power plants, fossil fuel power plants and other critical infrastructure facilities. Its customers include state-owned nuclear power plants in Eastern Europe.

From 1999 through 2004 the firm is alleged to have paid bribes to officials employed by the Ignalina Nuclear Power Plant or INPP, a state owned nuclear power facility in Lithuania. Over the five year period INPP awarded Data Systems a number of contracts including one in September 1999 valued at about $11.5 million; another in March 2000 valued at about $2.2 million; an October 2000 contract valued at $1.3 million; a July 2002 contract valued about €13 million; and a June 2003 agreement worth at about $4.4 million. The agreements resulted, according to the information, from a series of bribes paid to INPP officials, frequently through three subcontractors, one of which was a U.S. corporate entity.

Although the firm did not self-report, the DOJ termed its cooperation “extraordinary.” It included “conducting an extensive, through, and swift internal investigation; providing to the Department searchable databases of documents downloaded from servers, computers, laptops, and other electronic devices; collecting, analyzing, and organizing voluminous evidence and information to provide to the Department in a comprehensive report; and responding promptly and fully to the Department’s requests.” The firm also engaged in extensive remediation.

As a result of its cooperation the company paid a criminal fine which was substantially reduced. Specifically, the fine was reduced to about 30% below the bottom of the range calculated under the sentencing guidelines of 12.6 million to $25.2 million. The cooperation of the company began after it received a subpoena from the DOJ.

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