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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of New York

Friday, March 29, 2019

Manhattan Jeweler Pleads Guilty To Insider Trading

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that JEREMY MILLUL pled guilty to participating in a scheme to trade on material, nonpublic information in advance of the Sherwin-Williams Company’s acquisition of the Valspar Corporation.  MILLUL pled guilty to one count of conspiracy to commit securities fraud before U.S. District Judge Jed S. Rakoff.

U.S. Attorney Geoffrey Berman said:  “As he admitted today, Manhattan jeweler Jeremy Millul received inside information about a publicly traded stock from a friend who worked as an analyst for a credit rating agency.  Millul then used that information to make illegal trades which earned him over $100,000 in illicit gains.  The integrity of financial institutions is critical to ensuring that the stock-buying public is trading in a fair market.  We will continue to aggressively prosecute those who share and utilize nonpublic information for their own personal gain.”

According to the allegations contained in the Complaint and Indictment filed against MILLUL and his co-conspirators, and statements made in related court filings and proceedings:[1]

Rating Evaluation Services and the Insider

When a company announces an acquisition, the acquiring company’s credit rating agency often evaluates, and ultimately issues a press release relating to, the impact that the acquisition could have on the acquiring company’s credit rating.  Therefore, companies often contact rating agencies before an acquisition is publicly announced in order to secure the rating agency’s views on how a possible acquisition could impact a company’s credit rating.  All the major rating agencies offer a service – sometimes known as a Rating Evaluation Service (“RES”) – that provides the company with a rating committee decision with respect to a proposed acquisition.

In March 2016, a credit rating agency in Manhattan (the “Firm”) assigned a credit ratings analyst (the “Analyst”), to work on an RES for the Sherwin-Williams Company (“Sherwin-Williams”) in advance of its contemplated but unannounced acquisition of the Valspar Corporation (“Valspar”).  In connection with this assignment, the Analyst had access to material, nonpublic information (the “Inside Information”) about Sherwin-Williams’ acquisition of Valspar prior to the public announcement of the acquisition.  The Firm’s written policies prohibited the unauthorized disclosure of confidential information, which included the Inside Information.  During his tenure at the Firm, the Analyst reviewed and certified his duties of loyalty and confidentiality to the Firm and its clients.

The Insider Trading Scheme

In March 2016, the Analyst misappropriated the Inside Information about Sherwin-Williams’ acquisition of Valspar and passed it to MILLUL and Abell Oujaddou so that they could use it to make profitable trades.  On March 21, 2016, the first trading day after the public announcement of the acquisition, the price of Valspar stock increased approximately 23 percent over the prior day’s close.

MILLUL is a Manhattan jeweler who had a close personal friendship with the Analyst, as well as with a member of the Analyst’s immediate family.  The Analyst repeatedly provided MILLUL with Inside Information about the Valspar acquisition.  Although MILLUL had never owned a brokerage account in the United States and had never traded in U.S. securities prior to March 2016, he opened a brokerage account on March 13, 2016, and shortly thereafter purchased 480 shares of Valspar common stock.  On March 18, 2016, the last trading day before the acquisition was publicly announced, MILLUL also purchased 75 out-of-the-money Valspar call options.  After the acquisition was publicly announced, MILLUL sold his Valspar stock and options for approximately $106,806 in profits.

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JEREMY MILLUL, 32, of New York, New York, 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.  The maximum potential sentence in this case is prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the Court.

MILLUL is scheduled to be sentenced before Judge Rakoff on July 30, 2019 at 4:00 p.m.

Abell Oujaddou previously pled guilty and awaits sentencing before U.S. District Judge Jed S. Rakoff.

Mr. Berman praised the work of the FBI, and thanked the SEC for its assistance.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Christine I. Magdo and Andrew Thomas are in charge of the prosecution.


[1] As for the defendant who has pled not guilty, the description of the charges set forth herein constitute only allegations.

Financial Fraud
Securities, Commodities, & Investment Fraud
Press Release Number: 
Updated March 29, 2019