Ex-broker David Weishaus pleaded guilty to conspiracy and securities fraud in an insider trading scheme based on a tip involving International Business Machines Corp. (IBM)’s acquisition of software company SPSS Inc.
Weishaus, 33, told U.S. District Judge Andrew Carter in Manhattan that he learned about the acquisition in 2009 from an unidentified school friend and bought call options in SPSS ahead of the public announcement about the deal.
The U.S. said Weishaus and his friends together earned more than $1 million by trading on the tip. The government identified the person who tipped Weishaus as Thomas Conradt, his co-worker and friend.
“I know my conduct was wrong and I apologize to the court and especially my family, my mother and father,” Weishaus said.
Carter set sentencing for April 25 and allowed Weishaus to remain free on bond. His lawyer, Michael Grudberg, declined to comment after court.
Weishaus pleaded guilty to one count of conspiracy and one count of securities fraud. The securities fraud charge carries a maximum term of 20 years in prison, prosecutors in the office of Manhattan U.S. Attorney Preet Bharara said.
Conradt pleaded guilty in April to one count of conspiracy and two counts of securities fraud while a second man, Trent Martin, an Australian citizen, pleaded guilty in September. Prosecutors have said that the tip about the acquisition originated with a lawyer who worked on the team that represented IBM. That person hasn’t been charged.
The case is U.S. v. Martin, 12-cr-00887, U.S. District Court, Southern District of New York (Manhattan).