Former Partner At International Law Firm Pleads Guilty In Manhattan Federal Court To Insider Trading

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that WALTER C. LITTLE, a/k/a “Chet,” a former partner at an international law firm (the “Firm”), pled guilty yesterday to conspiracy to commit securities fraud.  Between February 2015 and May 2016, LITTLE used his position at the Firm to learn nonpublic information about certain of the Firms’ clients, including sensitive information regarding expected mergers and earnings.  LITTLE used that information to place securities trades and passed that information to Andrew M. Berke, who allegedly also traded on it.  LITTLE and Berke allegedly made approximately $1 million in illegal profits through their trading.  LITTLE pled guilty earlier today before the Honorable Katherine Polk Failla.  The charges against Berke remain pending.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “As he admitted in court today, Walter Little, while a law firm partner, accessed confidential information about firm clients, and then traded on it.  He violated the terms of his employment, the canons of his profession, and federal securities laws.  Now Walter Little awaits sentencing for his crime.”

According to allegations in a Complaint and Indictment[1] filed in Manhattan federal court, as well as previous court filings and statements made in public court proceedings:

LITTLE began working for the Firm in 2005, eventually becoming a partner.  The Firm provided legal services to a wide variety of corporations in connection with financial transactions and regulatory issues, among other things.  Clients regularly entrusted the Firm with nonpublic information when using its services, and the Firm consequently enacted policies requiring its employees to respect the confidences of such information.  LITTLE, however, failed to abide by the Firm’s internal policies prohibiting the improper use of its clients’ confidential information.  Even though he did not perform any billable work for the associated clients, LITTLE used the Firm’s document management system to view numerous documents relating to seven different companies.  These documents contained material nonpublic information about, among other things, an anticipated delisting from the NASDAQ stock exchange, clients’ involvement in mergers and acquisitions, clients’ anticipated earnings announcements, and a planned securities offering.  All of these events would have predictable impacts on the associated stocks’ prices, and, between February 2015 and May 2016, LITTLE traded stocks and options based on the information contained in these documents, making hundreds of thousands of dollars in profits.  In addition to trading on the information himself, LITTLE also provided the information to BERKE, his business associate and friend, who also traded on it and made hundreds of thousands of dollars in illegal gains as well. 

LITTLE has agreed to forfeit the illegal profits that he made through his trading as part of his plea agreement with the Government.  

*                *                *

LITTLE pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense.  LITTLE will be sentenced February 22, 2018, by Judge Failla.

BERKE is charged in the Indictment with one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison; six counts of securities fraud, each of which carries a maximum penalty of 20 years in prison; and one count of conspiracy to commit wire fraud, which also carries a maximum penalty of 20 years in prison.  These charges also have a maximum fine of $5 million, or twice the gross gain or loss from the offense.

The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.

The charges against BERKE are merely accusations and the defendant is presumed innocent unless and until proven guilty.

Mr. Kim praised the investigative work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Robert Allen is in charge of the prosecution.