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Press Release

Three Louisiana Residents Convicted of Insider Trading in Connection with Shaw Group Acquisition

For Immediate Release
U.S. Attorney's Office, Middle District of Louisiana

United States Attorney Brandon J. Fremin announced today that a federal jury has unanimously convicted three Louisiana residents of insider trading in connection with the acquisition of the Shaw Group, after a three-week jury trial before United States District Judge John W. deGravelles in the Middle District of Louisiana. 

KELLY LIU, age 32, SALVADOR RUSSO, III, age 35, both of Baton Rouge, Louisiana, and VICTORY HO, age 38, of Morgan City, Louisiana, have been convicted of conspiracy to commit securities fraud (insider trading), in violation of Title 18, United States Code, Section 371, and securities fraud (insider trading), in violation of Title 15, United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-1.  Each faces a significant term of incarceration, fines, restitution, and supervised release following imprisonment.  The defendants’ sentencing dates have not been set.

According to the evidence presented at trial in mid-2012, The Shaw Group (“Shaw”) was considering a potential merger opportunity.  At the time, LIU was a Shaw employee working in the Financial Planning and Analysis Department.  In late July 2012, Shaw and Chicago Bridge and Iron Company (“CB&I”) came to an agreement whereby CB&I acquired all outstanding shares of Shaw stock.  The merger between the two companies was publicly announced on July 30, 2012 (“the public announcement”).  As a result of the public announcement, Shaw’s stock price rose substantially.

As the evidence established, prior to the public announcement and through her job at Shaw, LIU obtained inside information that Shaw was being acquired by another company and passed the inside information to HO, through another individual, and to RUSSO, for their use in trading Shaw securities.  Thereafter, HO and RUSSO allegedly purchased Shaw securities before the public announcement.  HO sold his Shaw securities after the public announcement had caused Shaw’s stock price to rise, while RUSSO held his Shaw securities, all at the expense of Shaw shareholders and potential Shaw shareholders who were not privy to the inside information.  HO made approximately $300,000 from their illegal insider trading activities. 

United States Attorney Fremin stated, “The unanimous guilty verdicts returned by the jury today should send a strong message that corporate and securities fraud by insiders and others will not be tolerated and will be aggressively pursued by my office, together with our partners.  LIU had inside information that she knew was incredibly valuable, and she violated her corporate duties—and federal securities law—by sharing that inside information with HO and RUSSO, knowing that they would all benefit from the unfair advantage they had over the rest of the market.  I truly appreciate the efforts of our partners with the FBI, IRS-Criminal Investigations, the U.S. Secret Service, the Securities and Exchange Commission, and the Financial Industry Regulatory Authority, and the prosecutors and staff within this office, who worked tirelessly to uncover, investigate, and present the defendants’ sophisticated scheme to the jury.  I thank the jury for their thoughtful consideration and hard work throughout this lengthy and complex trial.”

FBI Special Agent-in-Charge Eric J. Rommal stated, "Motivated by greed and self-enrichment, the defendants in today's court case utilized material, non-public information and dishonest tactics in order to manipulate the securities market.  The jury's decision should send a clear message that anyone who uses insider information for profit will not be tolerated. The FBI New Orleans Field Office will continue to use all available resources to end this behavior. The FBI, in conjunction with the U.S. Attorney's Office, and our federal, state, and local partners, will investigate and prosecute all forms of white-collar crime in Louisiana."

U.S. Secret Service spokesperson Mason Brayman stated, “This case demonstrates the investigative capabilities of the U.S. Secret Service and the collaborative efforts of our law enforcement partners, specifically the U.S. Attorney’s Office for the Middle District of Louisiana, the Federal Bureau of Investigation, and the Criminal Investigative Division of the Internal Revenue Service."

This matter is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana and the Baton Rouge offices of the FBI, Secret Service, and IRS-Criminal Investigation.  It is being prosecuted by Assistant United States Attorneys Chris Dippel, Patricia Jones, and Adam Ptashkin.

Updated May 17, 2018

Securities, Commodities, & Investment Fraud