A Georgetown resident pleaded guilty Thursday to criminal conspiracy for his role in an insider-trading ring that pocketed more than $11 million in illegal stock gains.
Prosecutors unsealed the federal grand jury indictment naming Roger A. Williams and eight co-defendants in Charlotte. His plea agreement was not released Thursday.
The criminal charges followed a lawsuit brought by stock market regulators last week that identified the 51-year-old man as one of the individuals who profited from confidential information not available to other ordinary investors.
The group had help. Federal prosecutors accuse John Femenia, 31, of exploiting his former position as an investment banker at Wells Fargo Securities to tip off friends and family, either directly or indirectly, about four corporate mergers involving the firm’s clients before the deals were announced publicly.
Also identified as ringleaders in the trading scheme are Shawn Hegedus, a 32-year-old registered broker, and his girlfriend, Danielle C. Laurenti, 31.
The three New York residents are charged with conspiracy to commit insider trading, securities fraud and money laundering.
Williams and five other investors in the Carolinas, Florida, California and New York pleaded guilty to one count of conspiracy, prosecutors said.
According to last week’s lawsuit, Williams made more than $3.3 million in profits and paid about $550,000 in kickbacks to a company controlled by Femenia and Hegedus.
His last known address was a creekfront home in Debordieu Colony, an upscale gated resort near Pawleys Island. His attorney could not be reached for comment Thursday.
Big business mergers can create quick but illicit profit opportunities for traders who use tips from insiders to bet whether a stock will rise or fall once the information is made public.
The Securities and Exchange Commission described the volume of insider trading in this case as “serial” in nature. The buying and selling took place between March 2010 and this month, according to Thursday’s indictment.
The SEC said Williams relayed insider information he received from Hegedus to two friends in Charlotte and another in Greer, where Williams once lived. The lawsuit included precise details about the flurry of phone calls among the various traders, including dates, times and the lengths of the conversations.
The Associated Press contributed to this report.
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