Brooklyn Man Pleads Guilty to Insider Trading and Tax Evasion
For Immediate Release
U.S. Attorney's Office, Eastern District of New York
Defendant Received Tip from a Company Insider and Concealed his Income from the IRS
Jason Peltz pleaded guilty today in federal court in Brooklyn to securities fraud and tax evasion in connection with an insider trading scheme in which Peltz executed securities transactions based on material nonpublic information (MNPI) from a company insider. The proceeding was held before United States District Judge Nicholas G. Garaufis. When sentenced, Peltz faces up to 25 years in prison, forfeiture of his ill-gotten gains, and restitution to the Internal Revenue Service (IRS) of over $1 million.
Breon Peace, United States Attorney for the Eastern District of New York, Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Thomas Fattorusso, Special Agent-in-Charge, IRS Criminal Investigation, New York (IRS-CI), announced the guilty plea.
“With today’s plea, Peltz admitted to trading on material nonpublic information about a publicly traded company to line his own pockets and also to lying about his income to avoid paying taxes on a substantial tax liability,” stated United States Attorney Peace. “This Office will vigorously prosecute traders who seek to cheat the system, harm the investing public and undermine the integrity of our financial markets. We will hold accountable those who lie to avoid paying their fair share of taxes.”
Mr. Peace thanked the Securities and Exchange Commission, New York Regional Office, for their assistance during the investigation.
“Plain and simple. It's illegal to use non-public information to buy and sell stocks. Doing so manipulates the markets and can have detrimental effects on the wallets of individuals who play by the rules. But this defendant didn't stop there, he made significant financial gains and then claimed that he had no income in an effort to blatantly evade taxes,” stated IRS-CI Special Agent-in-Charge Fattorusso.
In February 2016, Peltz obtained MNPI from an insider at Ferro Corporation (“Ferro”) about a potential takeover offer (the “Ferro Takeover Bid”). Peltz used that MNPI to:
- Profitably trade in Ferro in the brokerage accounts of two co-conspirators,
- Tip other individuals, each of whom also profitably traded on MNPI about the Ferro Takeover Bid, and
- Tip a 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.
Peltz and the Ferro insider each received significant financial benefits from other co-conspirators shortly after Peltz traded in those co-conspirators’ brokerage accounts, and Peltz continued to receive large payments from co-conspirators, as well as other benefits, as payment for his trading activity. Peltz directed that these payments be made to corporate and nominee bank and credit card accounts, in order to conceal his income from the IRS. Despite receiving such payments, in 2017 Peltz falsely swore under penalty of perjury to the IRS that he had been unemployed since December 2015 and had no income.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Kaitlin T. Farrell, Sarah M. Evans, and Special Assistant United States Attorney Barry O’Connell are in charge of the prosecution, with assistance from Assistant United States Attorney Brian Morris of the Office’s Asset Recovery Section.
Brooklyn, New York
E.D.N.Y. Docket No. 21-CR-154 (NGG)
Danielle Blustein Hass
United States Attorney’s Office
Updated March 29, 2022