Geoffrey S. Berman, United States Attorney for the Southern
District of New York, announced that JEFFREY ROGIERS pled guilty today before
United States District Judge Alison J. Nathan to conspiracy to commit
securities fraud and fraud in connection with a tender offer for his role in an
insider trading scheme relating to material nonpublic information
misappropriated from an investment bank by Daniel Rivas, a former employee at
the bank. In August 2017, ROGIERS, as
well as Michael Siva, Roberto Rodriguez, Rodolfo Sablon, and Jhonatan Zoquier,
were arrested and charged in a 54-count Indictment for their involvement in
three overlapping insider trading chains, all stemming from information
misappropriated by Rivas. Prior to the
unsealing of the Indictment last year, Rivas and another participant in the
scheme, James Moodhe, pled guilty and both have been cooperating with the
Government in this investigation. Since
the unsealing of the Indictment, Sablon and Zoquier, in addition to ROGIERS,
have pled guilty and will be sentenced by Judge Nathan.[1]
U.S. Attorney Geoffrey S. Berman said: “Jeffrey Rogiers traded on stolen
confidential corporate information that he received, through a friend, from an
insider at an investment bank in order to generate illicit profits. Our Office and our law enforcement partners
remain committed to identifying and prosecuting those who engage in such abuses
of our nation’s securities markets.”
According to the allegations contained in the Indictment
filed against ROGIERS and his co-conspirators, and statements made in related
court filings and proceedings:
The Investment Bank and Rivas
From August 2013 through May 2017, Rivas was employed as a
technology consultant in the Research and Capital Markets Technology Group of
an investment bank (the “Investment Bank”).
In this role, Rivas had access to an internal, proprietary system
maintained by the Investment Bank (the “Deal Tracking System”) containing
material nonpublic information (“Inside Information”) about potential and
unannounced merger and acquisition transactions, including tender offers,
involving the Investment Bank. The
Investment Bank’s written policies prohibited the unauthorized disclosure of
confidential information, which included Inside Information. Rivas had a duty, among other obligations, to
maintain the confidentiality of all of the Investment Bank’s confidential information,
including the Inside Information.
Overview of the Insider Trading Schemes
From August 2014 through April 2017, Rivas violated the
duties of confidentiality he owed to the Investment Bank by serially
misappropriating material nonpublic information from the Investment Bank’s Deal
Tracking System and passing that information along to friends so that they
could utilize it to make profitable trades.
On more than 50 occasions between August 2014 and April 2017, Rivas
provided Inside Information about contemplated but unannounced merger and
acquisition (“M&A”) transactions and tender offer transactions involving
clients and prospective clients of the Investment Bank to friends who used that
information to purchase and sell securities.
In total, the insider trading based on the misappropriated Inside
Information by Rivas resulted in illicit profits of more than $5 million
through trading in more than two dozen securities. The Inside Information was passed through
three tipping chains.
The Rogiers Tipping Chain
With respect to ROGIERS, Rivas passed inside information to
his close friend Zoquier, who passed inside information to his close friend
ROGIERS.
From at least 2013 through August 2017, Rivas and Zoquier,
who lives and works in New Jersey, had a close relationship. ROGIERS lived and worked in California as a
computer and network security analyst and had a close relationship with
Zoquier. In or about 2013, Zoquier
introduced Rivas to ROGIERS. In or about
2015, at Zoquier’s request, Rivas and ROGIERS met in person and Rivas explained
to ROGIERS the nature of the Inside Information to which he had access. Between at least in or about March 2016 and
in or about April 2017, Rivas repeatedly provided Zoquier with Inside
Information misappropriated from the Investment Bank so that Zoquier could
execute profitable trades. Beginning in
approximately March 2016, Zoquier began sharing the Inside Information he
received from Rivas with ROGIERS so that ROGIERS could execute profitable
trades for himself. Throughout the time
that ROGIERS was obtaining Inside Information from Zoquier, ROGIERS understood
that Rivas was the source of the Inside Information. In addition to trading himself, ROGIERS also
caused at least one other individual to execute profitable trades based on the
Inside Information.
In total, Zoquier and ROGIERS caused trades generating more
than $200,000 in illicit profits based on Rivas’s Inside Information.
*
* *
ROGIERS, 34, of Oakland, California, pled guilty to one
count of conspiracy to commit securities fraud and fraud in connection with a
tender offer (Count Thirty-Nine of the Indictment), which carries a maximum
sentence of five years in prison and a maximum fine of $250,000, or twice the
gross gain from the offense. The maximum
potential sentence in this case is prescribed by Congress and is provided here
for informational purposes only, as any sentencing of the defendant will be
determined by the judge. ROGIERS will be
sentenced before United States District Alison J. Nathan later this year.
Sablon and Zoquier, two of the co-defendants named in the
Indictment along with ROGIERS, have also pled guilty and will be sentenced by
Judge Nathan. Any trial of the remaining
co-defendants, Siva and Rodriguez, will occur next year before Judge Nathan, on
charges of conspiracy to commit securities fraud and fraud in connection with a
tender offer, conspiracy to commit wire fraud, multiple counts of securities
fraud, and tender offer fraud. The
allegations contained in the Indictment as to those defendants are merely
accusations, and they are presumed innocent unless and until proven guilty.
Mr. Berman praised the investigative work of the Federal
Bureau of Investigation, and thanked the Securities and Exchange Commission for
its assistance. He added that the
investigation is continuing.
This case is being handled by the Office’s Securities and
Commodities Fraud Task Force. Assistant
United States Attorneys Andrea M. Griswold and Samson Enzer are in charge of
the prosecution.
[1] As for the defendants who have not pled guilty (Michael
Siva and Roberto Rodriguez), the charges described herein constitute only
allegations.
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