New York Stock Trader Admits Paying Bribes To Broker In Exchange For Stock
TRENTON, N.J. - A New York stock trader today admitted making bribe payments to a broker at an investment banking firm in exchange for stock allocations, U.S. Attorney Craig Carpenito announced.
Adam Rentzer, 52, of Roslyn, 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:
Rentzer was a trader who purchased and sold securities in initial and secondary public stock offerings, including offerings marketed by two investment banking firms in New York (“Firm A” and “Firm B”). Brian M. Hirsch was an employee of Firm A and later Firm B, and was responsible for allocating initial and secondary public stock offerings to clients.
Between mid-2013 and January 2017, Rentzer and others paid cash kickbacks to Hirsch in exchange for Hirsch providing favorable allocations from public stock offerings marketed by Firms A and B. The kickback payments were based on an agreed-upon percentage of the profits that Rentzer realized from his subsequent sales of stocks that he purchased in the stock offerings. Hirsch did not disclose any of these payments to Firms A and B and took steps to conceal his corrupt arrangement with Rentzer and others. In accepting the payments, Hirsch knowingly violated various policies and procedures of Firms A and B, including policies governing stock allocations and conflicts of interest. Rentzer paid Hirsch a total of $150,000 to $250,000.
Rentzer faces a maximum potential penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for Jan. 11, 2019.
On Dec. 19, 2017, Hirsch pleaded guilty to one count of violating the Travel Act in connection with the scheme. He is scheduled to be sentenced on Nov. 18, 2018.
In a separate civil action, the U.S. Securities and Exchange Commission (SEC) today filed a complaint against Rentzer in Trenton federal court.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, for the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office under the direction of Regional Director Marc P. Berger for its assistance in the investigation.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit.
Defense counsel: John F. Carman Esq., Garden City, New York