IBM Insider Case Analyst to Return to U.S. From Hong Kong
Trent Martin, the analyst wanted by the U.S. for an alleged insider-trading scheme tied to International Business Machines Corp. (IBM)’s $1.2 billion acquisition of SPSS Inc., won’t challenge his extradition, a Hong Kong court was told.
Martin consents to surrender, his lawyer, Kyle Wombolt, told Hong Kong’s Eastern Magistrates Court today. Martin told the court he was aware of the extradition proceedings and signed the required consent.
Martin was charged with conspiracy and securities fraud in Manhattan, federal prosecutors said on Dec. 26. The 33-year-old, who allegedly made a profit of $7,900 from insider trading, faces as long as 20 years in prison if convicted. He also faces a U.S. Securities and Exchange Commission lawsuit over the alleged scheme.
Wombolt, a partner at Herbert Smith Freehills in Hong Kong, couldn’t be reached for comment before today’s hearing.
Prosecutors and the SEC didn’t identify where Martin worked when the alleged crimes occurred in 2009. According to the SEC’s complaint, Martin left a New York brokerage in September 2009 to join a “related” firm in Stamford, Connecticut, where he remained until November 2010.
Martin worked at Royal Bank of Scotland Group Plc in the U.S. and an RBS joint venture in Australia before joining Nomura Holdings Inc. (8604) in September 2011, according to two people familiar with the situation who asked not to be identified because they aren’t authorized to speak about the matter.
The Financial Industry Regulatory Authority lists a Trent Martin who left ABN Amro in 2009 to work at the Stamford office of RBS, which participated in ABN Amro’s takeover in 2007. Martin’s broker registration at RBS ended in November 2010, Finra documents show.
Ed Canaday, a spokesman for Edinburgh-based RBS, declined to comment on the Martin case. Felicity Albert, a spokeswoman for Tokyo-based Nomura, also declined to comment on Martin.
Martin learned confidential information from a corporate lawyer, not identified in court papers, who was working on the IBM deal and with whom he was close friends, according to prosecutors.
Martin bought SPSS stock based on the information in June 2009 and shared the tip with his Manhattan roommate, Thomas Conradt, who worked as a stockbroker, according to the government. Contradt in turn tipped off his co-worker and friend David Weishaus, who passed the information to two other unidentified brokers they worked with, prosecutors said.
When the companies issued a press release on July 27, 2009, on IBM’s plan to buy SPSS for about $1.2 billion, or almost $50 a share, SPSS’s stock price rose 41 percent in one day. Martin and the brokers earned about $1.2 million in illicit profits from trades based on the information about the deal, prosecutors said. IBM, based in Armonk, New York, is the largest computer- services provider.
Conradt and Weishaus were indicted on charges related to the alleged scheme on Nov. 29. They have pleaded not guilty.
The case is U.S. v. Martin, 12-cr-887, U.S. District Court, Southern District of New York (Manhattan).
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