Senior Information Systems Engineer At National Law Firm Charged In Manhattan Federal Court With Insider Trading
Dmitry Braverman Charged With At Least Eight Different Trades Based On Nonpublic Information About Mergers And Acquisitions Activity Of The Law Firm’s Clients
Dmitry Braverman Charged with at Least Eight Different Trades Based on Nonpublic Information About Mergers and Acquisitions Activity of the Law Firm’s Clients
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that DMITRY BRAVERMAN was arrested this morning on securities fraud charges stemming from his involvement in an insider trading scheme. Specifically, BRAVERMAN traded on material nonpublic information about potential merger and acquisition activity of at least eight clients of his employer – a national, full-service law firm – resulting in profits of approximately $300,000. BRAVERMAN is expected to be presented today in San Francisco federal court before a United States Magistrate Judge.
U.S. Attorney Preet Bharara said: “As alleged, Dmitry Braverman, undeterred by the many felony convictions of others for insider trading, abused his access to nonpublic information about mergers and acquisitions for personal gain. Braverman’s charged actions are yet another example of brazen disregard for laws that are intended to keep the playing field level.”
FBI Assistant Director-in-Charge George Venizelos said: “Our message of deterrence has apparently still not been heard. Braverman used his computer prowess to snoop on deals and get inside information. He then made numerous trades with his illegal edge. Braverman finds himself under arrest and faces stiff jail time for his alleged crimes.”
In a separate action, the U.S. Securities and Exchange Commission (“SEC”) announced civil charges against BRAVERMAN.
According to the one-count Complaint unsealed today in Manhattan federal court:
From at least in or about September 2010 through December 2013, BRAVERMAN was engaged in an insider trading scheme. BRAVERMAN, who is a senior systems engineer at a full-service law firm (the “Law Firm”), was primarily responsible for maintaining and designing software in connection with the Law Firm’s finance function and had access to financial and billing databases. BRAVERMAN’s level of computer and database systems access of the Law Firm gave him access to information about, among other things, the Law Firm’s clients in potential merger and acquisition activity, as well information about the identities of the other parties to the potential deal.
Between about 2010 and 2011, BRAVERMAN engaged in at least four trades that were based on inside information, and tipped another person (“Individual-1”), who engaged in two of the same trades. In April 2011, however, BRAVERMAN and Individual-1 abruptly closed out the last of these trades on the same day that another employee of the Law Firm was arrested on separate insider trading charges. In November 2012, BRAVERMAN opened a new brokerage account and (again) began trading on the basis of inside information he obtained from the Law Firm. Specifically, between November 2012 and the present, BRAVERMAN engaged in at least four additional trades based on inside information. In total, BRAVERMAN made more than approximately $300,000 in profits from the trades between 2010 and the present.
BRAVERMAN, 41, was arrested this morning at his home in San Mateo, California. He is charged with one count of securities fraud. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the work of the Federal Bureau of Investigation, and thanked the SEC for its assistance. He added that the investigation is continuing.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Matthew L. Schwartz and Benjamin Naftalis are in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is
presumed innocent unless and until proven guilty.