Alcoholics Anonymous Reveals Insider Trading
The Securities and Exchange Commission’s (SEC) Philadelphia branch filed an insider trading complaint with federal regulators late last year. Since then charges have been placed against a financial consultant at Ameriprise Financial Services and four of his colleagues for shares that were purchased in Philadelphia Consolidated Holding Corp. in early 2008.
According to the the SEC, McGee learned about an acquisition through a conversation with an Alcoholics Anonymous sponsor and friend who confessed to great stress and workload related to the acquisition. In turn, McGee and his colleague at Ameriprise, Michael W. Zirinsky, bought up hundreds of thousands of dollars worth of stock in the insurance company for both themselves and family members. They also shared the tip with colleagues in Hong Kong.
Stock rose over 64% for the investors and the group made well over a million dollars in returns.
Elaine C. Greenberg, Associate Director of the SEC’s Philadelphia Regional Office comments on the trading:
“McGee stole information shared with him in the utmost confidence, and as securities industry professionals he and Zirinsky clearly knew better,”
“As this case demonstrates, we will follow each link in a tipping chain all the way to Hong Kong if necessary.”
An insider trading case is pending in the U.S. District Court for the Eastern District of Pennsylvania against McGee, Michael Zirinsky, Robert Zirinsky, and their Hong Kong affiliates Paulo Lam and Marianna sze wan Ho.
No word yet on how the cases have progressed, but it sounds like the SEC is taking this one seriously. I wonder what this guy from Alcoholic Anonymous thinks of his friend now. Didn’t he wonder how McGee got so rich, so fast? Interesting.