In a press release issued by the Federal Bureau of Investigation on January 25, 2013, Kevin Dowd of Boca Raton FL was arrested and charged in a criminal complaint with conspiracy to commit securities fraud.
According to the complaint, Dowd, who is 37 years old and who ,until just last month, was a vice president/financial advisor in Morgan Stanley Smith Barney's Aventura, FL office, tipped off a childhood friend about the impending acquisition of Pharmasset pharmaceutical company. That friend passed the stock tip along to one of his friends. Both then proceeded to amass large positions in Pharmasset stock and options which generated over $700,000 in illegal profit in less than two weeks. On November 21, 2011, the day of the public announcement Pharmasset stock skyrocketed 84%, closing at over $134.
A member of Pharmasset's board of directors was the Aventura branch's largest customer had informed his advisors at the branch of the impending acquisition. The supervisor of the Aventura branch told Dowd to refrain from trading in or recommending Pharmasset.
When confronted by the FBI in July 2012, Dowd falsely stated that he had never received information about the Pharmasset acquisition. Dowd faces charges punishable by a maximum of five years in prison and $250,000 fine.
Link to SEC complaint.
Rex Securities Law has been helping investors recover investment losses on non traded REITs, annuities, variable life insurance, unsuitable investments and as a result of securities fraud for 25 years.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.