A consultant for investor relations firm Lippert/Heilshorn & Associates Inc. was charged with trading on inside information he took from draft press releases for seven clients of the company.
Michael A. Lucarelli, 51, who served as LHA’s director of market intelligence, is charged with 13 counts of insider trading. He was arrested this morning at his Manhattan home and later released from custody on $500,000 bond after appearing in Manhattan federal court.
Lucarelli made more than $538,000 from insider trades in the stock of Trex Co. (TREX), FAB Universal Corp., PhotoMedex Inc. (PHMD), LCA-Vision Inc., Pacific Ethanol Inc. (PEIX), Dot Hill Systems Corp. (HILL) and Lifetime Brands Inc. (LCUT), according to a criminal complaint.
Manhattan U.S. Attorney Preet Bharara has brought dozens of insider-trading cases in recent years, cracking down on illicit tipping at hedge funds and expert networking firms.
According to the complaint, Lucarelli traded on information he got from press releases in which co-workers were preparing to announce corporate events including earnings and mergers. Lucarelli made trades from his office computer in four brokerage accounts, according to prosecutors.
FBI agents searched Lucarelli’s LHA office on July 24, according to the complaint. Inside a locked briefcase they found a draft release of Trex financial results. The agents photographed the document and returned it to the briefcase. Lucarelli later made $89,487 trading in Trex stock after the final press release was issued, according to the complaint.
In court today, Assistant U.S. Attorney Brian Blais said agents seized an “unidentified white powder” believed to be drugs in their search.
Lucarelli’s lawyer, Oscar Michelen, declined to comment on the charges after the hearing.
In a related case, Lucarelli was sued today by the U.S. Securities and Exchange Commission, which accused him of making illicit profits of more than $950,000 in about a year. The SEC identified six additional stocks Lucarelli allegedly traded in using inside tips.
Peter Mirabella, LHA’s chief financial officer, didn’t return a voice-mail message seeking comment on the charges.
The case is U.S. v. Lucarelli, 14-mg-01878, U.S. District Court, Southern District of New York (Manhattan).
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