Former New York Investment Broker Admits Accepting Hundreds Of Thousands Of Dollars In Bribes In Exchange For Stock
TRENTON, N.J. - A former broker of two New York investment banking firms today admitted accepting hundreds of thousands of dollars in bribe payments in exchange for more favorable stock allocations, Acting U.S. Attorney William E. Fitzpatrick announced.
Brian M, Hirsch, 42, of Farmingdale, New York, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of violating the Travel Act by engaging in a commercial bribery scheme.
According to documents filed in this case and statements made in court:
Hirsch was employed at the New York offices of two investment banking firms, identified as “Firm A” and “Firm B” in the information. Hirsch was responsible for allocating securities from initial and secondary public stock offerings to the firms’ clients.
Between January 2012 and November 2016, Hirsch accepted numerous cash kickbacks from three individuals – identified in the information as “CC#1,” “CC#2,” and “CC#3” – in exchange for securities from public stock offerings marketed by Firms A and B. The kickback payments were based on an agreed-upon percentage of the profits that CC#1, CC#2, and CC#3 would make from the stock offerings.
Hirsch did not disclose any of these payments to Firms A and B and took steps to conceal his corrupt arrangements with CC#1, CC#2, and CC#3. For instance, Hirsch signed periodic certifications to Firm A falsely representing that he had complied with the firm’s prohibition on “quid pro quo” arrangements or similar pre-determined agreements with investor clients in connection with stock allocations. Hirsch also falsely certified that he had complied with Firm A’s policies concerning conflicts of interest. Hirsch made similar misrepresentations and omissions to Firm B.
Over the course of the scheme, Hirsch accepted between $550,000 and $1.5 million in kickback payments from CC#1, CC#2, and CC#3.
Hirsch faces a maximum potential penalty of five years in prison and a $250,000 fine. Hirsch also agreed to pay a forfeiture money judgment in an amount to be determined prior to or at the time of sentencing, which is currently scheduled for Apr. 11, 2018.
In a separate civil action, the U.S. Securities and Exchange Commission (SEC) today filed a complaint against Hirsch in Trenton federal court.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation leading to today’s guilty plea. He also thanked the SEC’s New York Regional Office for its assistance.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit in Newark.
Defense counsel: Elliot G. Sagor Esq., New York