Bucks County Stock Broker Sentenced to 10 Months in Federal Prison for Insider Trading
PHILADELPHIA – U.S. Attorney William M. McSwain announced that Kevin Hamilton, 61, of Wyncombe, PA was sentenced today to 10 months in prison. He was also ordered to pay $635,000 in restitution and to forfeit $656,421.11 in proceeds resulting from his criminal activity.
Hamilton misused an investment banking client’s non-public information for the benefit of himself, his company, and other clients. Hamilton pleaded guilty in September, 2017 to two counts of securities fraud.
“The defendant was guided by pure greed,” said U.S. Attorney McSwain. “We should never lose sight of the fact that there are real victims in this case. The defendant’s schemes undermined the integrity of the securities markets and resulted in hundreds of thousands of dollars in losses to investors. This is textbook insider trading and a clear violation of the law. For this defendant and others like him, a prison sentence is the necessary consequence.”
First, in 2009 and 2010, Hamilton abused his position as a principal of the Philadelphia Brokerage Corporation (“PBC”) to engage in illegal insider trading in connection with the stock of BMP Sunstone Corporation. As one of three principals of PBC, Hamilton provided brokerage services to PBC’s clients while another principal was responsible for PBC’s investment banking business. In his role, Hamilton obtained access to material, non-public information about BMP Sunstone’s potential sale from the investment banking side of PBC’s business and then provided this inside information to some of his brokerage clients. In addition, Hamilton used this information to trade in his clients’ discretionary accounts with PBC and to make trades in his personal account. These activities breached PBC’s clear policies against insider trading and PBC’s duty to BMP Sunstone to keep this information confidential. As a result of this activity, Hamilton, his clients, and tippees reaped over $2.3 million in illegal profits.
The case was investigated by the Federal Bureau of Investigations, the Securities and Exchange Commission, and is being prosecuted by Assistant U.S. Attorneys Judy G. Smith and Patrick J. Murray.