Sept. 21 (Bloomberg) -- Former investment adviser Scott Allen, accused of taking part in a $2.6 million insider-trading scheme with an independent film producer, was allowed to remain free on a $500,000 bond.
Allen, 45, of Atlanta, and film producer John Bennett were accused Sept. 15 of taking part in the scheme involving drug-company takeovers.
U.S. Magistrate Judge Frank Maas in New York today agreed to let Allen remain free on the bond and ordered him to turn over his travel documents and regularly report to court authorities by telephone.
Allen and his lawyer, Brian McEvoy, declined to comment after court.
In his role at a consulting firm, Allen learned inside information about the April 2008 acquisition of Millennium Pharmaceuticals Inc. by Takeda Pharmaceutical Co. and about the September 2009 purchase of Sepracor Inc. by Dainippon Sumitomo Pharma Co., according to a criminal complaint filed by prosecutors in the office of Manhattan U.S. Attorney Preet Bharara.
Before the deals were announced, Allen disclosed the information to Bennett, a longtime friend, the U.S. said. Bennett, 48, of Norwalk, Connecticut, gained $1.1 million in profits trading on the information, the U.S. said. Allen and an unidentified person who is cooperating with the U.S. made $2.6 million, according to prosecutors.
Bennett, who worked for Merrill Lynch from 2005 to 2007, has acted in several films, including the 1990 courtroom drama “Presumed Innocent,” according to the website IMDb.com. He cofounded Bennett Robbins Productions in 2008, according to the company’s website.
Both men are each charged with one count of conspiracy to commit securities fraud and two counts of securities fraud. If convicted, they face as long as 20 years in prison on each count of securities fraud and fines of as much as $5 million, prosecutors said.
The case is U.S. v. Allen, 11-MAG-2361, U.S. District Court, Southern District of New York (Manhattan).
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