Independent film producer John Bennett pleaded guilty to participating in a $2.6 million insider-trading scheme in which he paid a colleague for secret tips about drug-company takeovers.
Bennett, of Norwalk, Connecticut, who worked for Merrill Lynch & Co. from 2005 to 2007, was accused of later making illegal trades using information from a friend about the April 2008 acquisition of Millennium Pharmaceuticals Inc. by Takeda Pharmaceutical Co. (4502) and about the September 2009 purchase of Sepracor Inc. by Dainippon Sumitomo Pharma Co. (4506), according to court filings.
“In 2008 and 2009 I received confidential, nonpublic information from a colleague about two public companies, Millennium Pharmaceuticals and Sepracor,” Bennett told U.S. District Judge Deborah Batts in New York today. “I executed securities trades based on that information about unannounced mergers and I paid him for that information.”
Bennett has acted in several films, including the 1990 courtroom drama “Presumed Innocent,” and “Last Exit to Brooklyn” according to the website IMDb.com. He co-founded Bennett Robbins Productions in 2008, which in 2010 produced “Playback,” described on the company’s website as a “supernatural thriller” starring Christian Slater.
Bennett told the judge he met his colleague, identified by prosecutors as Scott Allen, a former investment adviser from Atlanta, at Manhattan restaurants and paid him an unspecified amount of money for the tips. He pleaded guilty to one count of conspiracy to commit securities fraud and two counts of securities fraud.
Bennett gained $1.1 million in profits trading on the information he got from Allen, according to prosecutors in the office of Manhattan U.S. Attorney Preet Bharara.
Batts said each charge of securities fraud carries a term of as long as 20 years in prison. She scheduled Bennett’s sentencing for April 23 and agreed he could remain free on $500,000 bond.
Henry Mazurek, Bennett’s lawyer, said he didn’t have an immediate comment after court.
Bennett and Allen were first arrested and charged in September. The U.S. Securities and Exchange Commission filed a related civil suit that month against both men and an unidentified third person alleging that the scheme generated $2.6 million in illicit profits.
Allen was named in a separate indictment filed on Nov. 18 in which he was accused of conspiracy to commit securities fraud and seven counts of securities fraud. His case is pending before U.S. District Judge Harold Baer.
The case is U.S. v. Bennett, 11-cr-927, U.S. District Court, Southern District of New York (Manhattan).
To contact the editor responsible for this story: Michael Hytha at email@example.com