U.S. charges investor relations firm employee with insider trading

Gadsden Properties

26/08/2014 16:19

By Joseph Ax and Nate Raymond 
    NEW YORK, Aug 26 (Reuters) - An employee of a New York 
investor relations firm was charged with insider trading on 
Tuesday, after federal authorities accused him of using 
nonpublic information to earn more than $538,000 in illicit 
profits. 
    Michael Lucarelli, the director of market intelligence at 
Lippert/Heilshorn & Associates, was arrested early Tuesday 
morning at his Manhattan apartment, a spokesman for the FBI  
said. A criminal complaint made public in federal court charged 
Lucarelli with 13 counts of securities fraud. 
    A lawyer for Lucarelli could not immediately be identified. 
Lucarelli did not immediately respond to a call for comment. 
A representative for Lippert/Heilshorn did not immediately 
respond to a request for comment. 
    Lucarelli, 51, is accused of trading in several companies 
that were clients of his firm, including TREX Co Inc  TREX.N , 
FAB Universal Corp  FABU.PK , PhotoMedex Inc  PHMD.O , 
LCA-Vision Inc, Pacific Ethanol Inc  PEIX.O , Dot Hill Systems 
Corp  HILL.O  and Lifetime Brands Inc  LCUT.O . 
    Authorities said Lucarelli opened several brokerage accounts 
without divulging his employment at Lippert/Heilshorn, where he 
had access to the companies' financial announcements prior to 
their public release. 
    The trades began in August 2013 and continued until earlier 
this month, the complaint said. 
    According to the complaint, federal agents executed a search 
warrant of his office in July and found a draft copy of a press 
release from TREX containing its second quarter results dated 
Aug. 4, 2014 in his locked briefcase. The investigators 
photographed the release and returned it to the briefcase in 
order to keep Lucarelli unaware of the probe, the complaint 
said. 
    During the following week, one of Lucarelli's brokerage 
accounts purchased more than 37,000 shares of TREX; the majority 
of the shares were sold on Aug. 4 for a profit of nearly 
$90,000, the complaint said. 
    Authorities also said they have evidence that Lucarelli 
engaged in other trading in various clients of Lippert/Heilshorn 
that followed a similar pattern. 
 
 (Reporting by Joseph Ax and Nate Raymond; Editing by Grant 
McCool) 
 ((joseph.ax@thomsonreuters.com; 1-646-223-6594 1-917-848-0813; 
Reuters Messaging: joseph.ax.thomsonreuters.com@reuters.net)) 
 
Keywords: USA INSIDERTRADING/INVESTORRELATIONS