Wealth Manager In Florida Admits Insider Trading

Sandra Kilhof Reporter 1 October 2013

Wealth Manager In Florida Admits Insider Trading

A former advisor and executive at a global wealth management firm has pleaded guilty in a US federal court to insider trading charges related to Gilead Sciences' $11 billion acquisition of Pharmasset.

The US Securities and Exchange Commission said Kevin Dowd, 38, of Boca Raton, FL, used non-public information about the impending deal to tip off two friends and investors who made about $700,000 in total profit off of trades based on the tips.

According to the SEC, Dowd attained the information when a board member of Pharmasset, who was the largest customer of the wealth management firm for which Dowd worked, let it slip that Gilead had an upcoming offer for Pharmasset.

On November 18, 2011, three days before the offer was announced, Dowd’s two investors offered $137 per share in cash, representing a premium of about 89 per cent over Pharmasset's closing price, the US Department of Justice added.

The investors then liquidated their positions after the deal was announced.

Dowd himself admitted to receiving $35,000 in exchange for the tip, according to US attorney Paul Fishman.

Consequently, Dowd pleaded guilty to conspiracy to commit securities fraud and faces up to five years in prison and a fine of $250,000 when he is sentenced on January 15, 2014.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes