Former Public Company Executive Profits $145,754 in Insider Trading Scheme, Faces 20 Years Behind Bars: DOJ

A former executive at a publicly traded company has pleaded guilty to orchestrating a federal insider trading scheme, according to the U.S. Department of Justice.

Juan Carlos Esparza – who once served as President and Chief Operating Officer – admitted to using material non-public information to execute trades that directly benefited another individual, identified as “Individual A” in court filings.

The DOJ says  that court documents show that the defendant was privy to non-public intelligence about a pending corporate acquisition.

Using his high-level role, Esparza bought shares on behalf of Individual A, knowing that once the acquisition went public, the stock would likely surge.

As expected, after the acquisition was announced, the stock’s price rose substantially. The executive later sold the shares – all while acting on behalf of Individual A – and realized an illegal profit of $145,754.69.

By pleading guilty to securities fraud, the former COO faces up to 20 years in prison, depending on how a judge applies the U.S. Sentencing Guidelines.

Also arrested in connection with the scheme was 35-year-old Karpis Srapyan, who was sentenced to 57 months in prison and ordered to pay restitution of $3,203,574.

47-year-old Mihran Panosyan was sentenced to 57 months in prison and ordered to pay restitution of $4,680,146, while 44-year-old Petros Fichidzhyan was sentenced to 12 years in prison and ordered to pay restitution of $17,129,060.

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