A former Ameriprise Financial Inc stockbroker previously accused by U.S. securities regulators of engaging in insider trading ahead of a 2010 merger by Pfizer Inc has pleaded guilty to conspiracy to commit securities fraud.
Michael Shechtman, who left Ameriprise in 2012, pleaded guilty to a single conspiracy charge Tuesday before U.S. Magistrate Judge Steven Locke in Central Islip, New York, according to court records.
The exact details of his plea were unclear, as the transcript was ordered sealed. But a charging document said the case related to Shechtman's purchase of call options and shares of King Pharmaceuticals Inc in August 2010.
The U.S. Securities and Exchange Commission had previously accused Shechtman of making about $109,041 in illegal profits by trading in King in August 2010 ahead of news almost two months later of Pfizer's plans to acquire it for $3.6 billion.
Jeffrey Cox, a lawyer for Shechtman, did not respond to requests for comment. A spokeswoman for Loretta Lynch, the U.S. Attorney for the Eastern District of New York, did not respond to requests for comment Wednesday.
The SEC, which filed its civil lawsuit in September 2013 in a federal court in South Florida, had said Shechtman learned of the merger from his friend Tibor Klein, a Melville, New York, resident who owned advisory firm Klein Financial Services.
The SEC said Klein in turn found out about the impending merger from Robert Schulman, a Washington, D.C., intellectual property lawyer with the law firm Hunton & Williams who had been working on litigation for King Pharmaceuticals.
The SEC said during an August 2010 meal at the home of the lawyer, Schulman after several glasses of wine became intoxicated and blurted out, "It would be nice to be King for a day."
The SEC said the statement was intended to imply Schulman had some kind of information about King. Subsequent trading by Klein in King stock allowed him to make $328,375 for himself and his clients, the SEC said.
In January, Shectman agreed to a partial settlement with the SEC in January and consented to the entry of a permanent injunction against him.
A month later, the SEC sought to put its case on hold while Lynch's office pursued "a related, ongoing criminal investigation."
A lawyer for Klein did not respond to requests for comment Wednesday. Schulman did not respond to a similar request for comment.
