WASHINGTON (CN) - Two Capital-area friends made $1 million by illegal inside trading on information from an investment banker, the SEC claims in court.
Walter D. Wagner, 33, of Rockville, Md., made $571,784 from the illegal trades, and Alexander J. Osborn, 29, of Alexandria, Va. made $439,830, the SEC says in its 23-page lawsuit.
The men traded ahead on information they got by Wagner's friend John W. Femenia, who worked at a bank that was considering whether to finance an acquisition, the SEC says.
Femenia was charged in December 2012 with inside trading, and barred from the securities industry.
The deal involved the acquisition of The Shaw Group by Chicago Bridge & Iron Co.
Both defendants "trade[d] heavily" in Shaw Group securities ahead of the public announcement on July 30, 2012; the stock price jumped by 55 percent after the announcement, the SEC says.
Wagner agreed to settle by disgorging his ill-gotten gains, with interest and a penalty, the SEC said. It said a parallel criminal action has been brought by the U.S. attorney for the Western District of North Carolina.
Osborn is fighting the charge.
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