A third person has been charged with insider trading by the Securities and Exchange Commission in connection with illegal trades made ahead of IBM Corp.’s (NYSE: IBM) acquisition of SPSS Inc.
In an amended complaint filed in federal court in Manhattan, the SEC charged research analyst Trent Martin as the source of confidential information used by two brokers in an insider trading scheme that yielded more than $1 million in illicit profits.
IBM purchased Chicago-based software firm SPSS in July 2009 for $1.2 billion.
The SEC said Martin worked at a brokerage firm in Connecticut and specialized in Australian equity investments.
After obtaining nonpublic information about IBM’s planned acquisition of SPSS from an attorney friend who was working on the deal, Martin allegedly used the information to make a profit by purchasing shares of SPSS knowing they would rise when news of the acquisition broke.
Martin later tipped his roommate Thomas C. Conradt, who traded and tipped his friend and fellow retail broker David J. Weishaus. Conradt and Weishaus were charged with insider trading by the SEC last month.
The SEC said Martin was specifically named as the source of the brokers’ information in instant messages between Conradt and Weishaus about their illegal trading.