Wells Fargo investment banker accused of insider trading

A Wells Fargo investment banker has been accused by federal regulators of passing tips about pending mergers to nine others in an insider-trading ring.

According to a federal civil lawsuit filed yesterday by the Securities and Exchane Commission said John Femenia and his nine associates, also named as defendants, made over $11 million by trading on the non-public information.

The SEC obtained a court order freezing the assets of the defendants and two companies associated with them. William P Hicks, the associate director for enforcement at the SEC in Atlanta said the agency obtained a court order freezing the assets of the defendants and two associated companies.

Femenia, 30, and his friend Shawn Hegedus, a stockbroker, are alleged to have tipped off the others over a two-year period ending in July, according to the SEC suit, filed in US District Court in Charlotte North Carolina. The lawsuit is aimed as recovering the alleged illicit profits and have a judge impose civil fines.

The mostly Charlotte based Femenia now lives in New York, the SEC said. According to Hicks, Femenia and the other defendants were not yet represented by attorneys.

According to the SEC, Femenia tipped his friend, Shawn Hegedus, a registered broker-dealer and the two tipped other friends, leading to a "massive, serial insider-trading ring" that spread across five states.