Jury Convicts Waltham Man of Insider Trading of Stock in American Superconductor Corporation
BOSTON – A Waltham man was convicted today of conspiracy and insider trading in connection with tipping friends and fellow golfers with inside information about the business activities of American Superconductor Corporation (AMSC).
Eric McPhail, 41, was convicted following a seven-day jury trial and one and one half hours of jury deliberations of conspiring to commit securities fraud and securities fraud. McPhail had been indicted in July 2014. U.S. District Court Judge Denise J. Casper scheduled sentencing for Sept. 17, 2015.
According the evidence presented at trial, starting around July 2009, McPhail, who is a competitive amateur golfer, began giving his friends inside information about AMSC’s business activities and upcoming earnings announcements. McPhail obtained this information during golf games at the Oakley Country Club in Watertown and other social outings with a close friend who was a senior executive at AMSC. The executive, however, trusted McPhail to keep the information to himself and was unaware that McPhail was using it to tip his friends.
Over a two-year period spanning July 2009 to April 2011, several of McPhail’s friends repeatedly traded on the inside information. According to evidence presented at trial, McPhail ’s tippees successfully traded on material, nonpublic information about AMSC on at least five occasions, making a total of over $500,000 in illicit gains. One of McPhail’s tippees, Douglas Parigian, who is also a competitive amateur golfer, previously pleaded guilty to securities fraud charges on May 12, 2015.
The securities fraud charge provides a maximum sentence of 20 years in prison, three years of supervised release and a $5 million fine. The conspiracy charge provides for a maximum sentence of five years in prison, three years of supervised release and a $250,000 fine. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Paul Levenson, Regional Director of the Securities and Exchange Commission (SEC), Boston Regional Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Andrew E. Lelling and Seth B. Kosto of Ortiz’s Economic Crimes Unit.