Australian analyst accused of insider trading to be extradited to US
05 January 2013
An Australian analyst, accused of playing a major role in an insider trading scam involving IBM's takeover of another firm in 2009, on Friday told a Hong Kong court that he would not challenge his extradition to the US.
Trent Martin, the 33-year-old Australian research analyst, has been charged with one count of conspiracy to commit securities fraud and one of securities fraud. If convicted, he faces up to 25 years in prison and more than $5 million in fines.
The Securities and Exchange Commission last month filed charges against Trent for tipping off some friends and also trading in the scrips of SPSS Inc of Chicago, just days before IBM announced its 2009 acquisition of the firm.
After the SEC filed charges against him of insider trading, Trent fled the US to Australia. But on 22 December he was arrested in Hong Kong. On Friday, his lawyers informed the Hong Kong court that Martin would not challenge his extradition.
While Martin made a profit of just $7,900, two other friends of his whom he had tipped off made more than a million dollars in profits from trades based on the inside information that IBM was buying SPSS.
According to federal prosecutors, Martin was tipped off about the $1.2-billion deal by IBM days before the public announcement by the company, by a New Zealand lawyer who was his close friend. The lawyer is now a prosecution witness.
Martin, who worked at a US brokerage firm, shared the information with Thomas Conradt, a stockbroker who was his roommate, who then told David Weishaus, another broker and friend of his about the deal. The two brokers bought a large number of SPSS stocks and made a hefty profit of over $1 million after the stock price of SPSS surged by more than 40 per cent in one day after IBM's official offer was made. IBM agreed to pay $50 per share for SPSS on July 27, 2009, which was a 42 per cent premium on its traded price the previous day.
Both the brokers pleaded not guilty, but were indicted on charges of insider trading in November.