Texas Man Sentenced for Insider Trading Scheme
Defendant Received Information From Former Investment Bank Analyst Tied to Case Against NFL Linebacker
PHILADELPHIA – United States Attorney William McSwain announced that Hamed Ettu, 44, of Richmond, TX was sentenced today to three years’ probation, the first nine months of which he will be required to serve in home confinement, 120 hours of community service and a fine of $15,000. U.S. District Judge Gene E.K. Pratter also imposed a forfeiture judgment of $73,244, which the defendant has already paid.
The defendant pleaded guilty in February 2019 to an Information charging him with conspiracy to commit securities fraud. According to the Information, Damilare Sonoiki, charged elsewhere, then a junior analyst at a global investment bank in New York, provided material non-public information to Ettu. Sonoiki obtained this information in violation of his duty of confidentiality that he owed to the investment bank. In a separate case, Sonoiki also allegedly passed inside information to former Philadelphia Eagles linebacker Mychal Kendricks.
Relying on the material non-public information he received from Sonoiki, Ettu illegally purchased call options in the target companies, Compuware and Move, between July and September 2014. When proposed mergers were announced for each company, the value of Ettu’s options increased significantly. During the period of the conspiracy, Ettu made a profit of more than $93,000 on the trades.
“This type of illegal behavior – insider trading based on material, non-public information – undermines faith in our financial markets and harms ordinary investors who play by the rules,” said U. S. Attorney McSwain. “Prosecuting securities fraud and thereby safeguarding the integrity of the public securities markets has been and will continue to be a top priority of my Office.”
“The manipulation of our markets undermines all the investors who take great care to play by the rules,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “Through cases like this, the FBI continues to work against such corruption to help ensure fairness in the marketplace.”
The case was investigated by Federal Bureau of Investigation and the Securities and Exchange Commission, and is being prosecuted by Assistant United States Attorney David J. Ignall.