Preet Bharara, the United States Attorney for the Southern District of New York, announced today that DMITRY BRAVERMAN, a former Senior Systems Engineer at a prominent national law firm, pled guilty today in Manhattan federal court to insider trading. Specifically, BRAVERMAN admitted repeatedly using material nonpublic information concerning planned merger and acquisition activity of at least eight clients of the law firm to acquire stock and options, resulting in profits of more than $300,000. BRAVERMAN, who was arrested in September 2014, pled guilty to a one-count Information before U.S. District Judge Paul A. Engelmayer.
Manhattan U.S. Attorney Preet Bharara said: “Dmitry Braverman abused the trust not only of his employer, a major law firm, but also of the numerous companies that relied upon the law firm to handle sensitive matters. Today’s conviction is yet another in a long line.”
According to the allegations contained in the Information filed today in Manhattan federal court, the underlying criminal Complaint, and statements made during court proceedings:
From at least September 2010 through December 2013, BRAVERMAN was engaged in an insider trading scheme. BRAVERMAN, who was a senior systems engineer at a national, full-service law firm, was primarily responsible for maintaining and designing software in connection with the law firm’s finance function, and had access to financial and billing databases. BRAVERMAN consequently had computer and database systems access to confidential information about, among other things, the law firm’s clients in potential merger and acquisition activity, as well as information about the identities of the other parties to the potential deal.
Between about 2010 and 2011, BRAVERMAN engaged in at least four trades that were based on inside information concerning potential mergers and acquisition activity of clients of the law firm. In April 2011, however, BRAVERMAN closed out the last of these trades on the same day that another employee of the law firm, Matthew Kluger, was arrested on separate insider trading charges. In November 2012, BRAVERMAN opened a new brokerage account in the name of a relative living in Russia, and again began trading on the basis of inside information he obtained from the law firm. Specifically, between November 2012 and December 2013, BRAVERMAN engaged in at least four additional trades based on inside information. In total, BRAVERMAN made more than approximately $300,000 in profits from the trades.
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BRAVERMAN, 41, of San Mateo, California, pled guilty to one count of securities fraud, without the benefit of a plea agreement. The securities fraud count carries a maximum sentence of 20 years in prison, a maximum fine of $5 million, or twice the gross gain or loss from the offense, and forfeiture of the proceeds of the offense. BRAVERMAN is scheduled to be sentenced by U.S. District Judge Paul A. Engelmayer on March 6, 2015. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission, which has filed civil charges in a separate action.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Matthew L. Schwartz and Benjamin Naftalis are in charge of the prosecution.