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Tuesday
Sep162014

Wilson Sonsini IT tech charged with insider trading

The Justice Department Tuesday arrested a senior information systems officer at a Silicon Valley-based law firm for insider trading that allegedly earned him about $300,000.

Dmitry Braverman of Wilson Sonsini Goodrich & Rosati was charged with one count of securities fraud in a criminal complaint filed in federal court in Manhattan.

He was arrested in San Mateo, California early Tuesday morning, the FBI said.

Braverman, 41, was also charged Tuesday in civil complaint by the SEC.

The DOJ alleged that from 2010 to 2013, Braverman traded in stocks and call options in eight companies based on non public information. The companies included Gymboree Corp., Drugstore.com Inc., Epicor Software Corp., Xyratex, Dealertrack Technologies, and Seagate Technology.

The companies were involved in deals handled by lawyers at Wilson Sonsini. The firm has 14 offices in the U.S., Asia, and Europe. It said it put Braverman on administrative leave after learning about his arrest.

Braverman also tipped his brother, who traded stock in two of the deals.

The SEC said Braverman began his insider trading using accounts in his own name. He stopped after a lawyer at the firm was charged by the feds in a separate insider trading case. Matthew Kluger, a Wilson associate, was arrested in April 2011. He pleaded guilty and in June 2012 was sentenced to 12 years in prison.

About 18 months Kluger's arrest, Braverman restarted his insider trading in a brokerage account in the name of a relative living in Russia. 

The SEC said Tuesday its investigators were "able to [detect] a suspicious pattern of trades and trace them back to Braverman."

Braverman continued the insider trading through 2013.

Wilson Sonsini spokesperson Courtney Dorman said in a statement, “Today’s charges against a staff member are deeply disturbing to say the least. Client confidentiality is at the center of all we do, and we have strict policies and internal controls established to protect it. We have and will continue to provide our full support to the federal investigation.”

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.