Jury Convicts Two Men|of Insider Trading

     (CN) – A Chicago federal jury found two real estate workers guilty of insider trading on Thursday for making nearly a quarter of a million dollars on their knowledge of corporate acquisitions.
     The U.S. Securities and Exchange Commission filed a lawsuit against Ralph Pirtle and Morando Berrettini in 2010, claiming Pirtle tipped off Berrettini about upcoming deals.
     Pirtle was director of real estate for Philips Electronics while Berrettini owned Berco Realty, which became a “preferred real estate vendor” for Philips through Pirtle, according to the SEC complaint.
     Pirtle allegedly tipped Berrettini to Philips’ intent to buy healthcare companies Lifeline Systems, Invacare and Intermagnetics. Berrettini then quickly bought stock in those companies and made more than $240,000 from it, according to the SEC.
     SEC prosecutors say Berrettini made payments to third parties on Pirtle’s behalf in the form of cashier’s checks.
     “These payments were made on 17 separate occasions in amounts ranging from $1,700 to as much as approximately $36,000. The total amount of the alleged loans was over $226,000,” according to the government’s lawsuit. Pirtle allegedly used the money for cars, trips to Las Vegas and gambling.
     During the investigation, Berrettini produced signed promissory notes that purported to document that the payments were arms-length loans. Pirtle had not made payments on any of the alleged loans when the investigation began. Berrettini claimed that his stock purchases were based on a hunch, the SEC said.
     On Thursday, the federal jury found Pirtle guilty of tipping Berrettini with non-public information about Lifeline, Invacare and Intermagnetics stocks, according to the SEC. It also found Berrettini liable on three counts for trading in those three stocks based on Pirtle’s tips.
     “Pirtle and Berrettini used their access to highly confidential information to illegally profit at the expense of ordinary investors who played by the rules,” Andrew Ceresney, SEC’s director of enforcement, said. “Today’s jury verdict reaffirms our commitment to aggressively root out and prosecute insider trading schemes in order to protect the integrity of our markets.”

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