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SEC charges Wells Fargo banker, 9 others in insider-trading case

Dec 06 2012 Sarah N. Lynch, Reuters

U.S. securities regulators on Wednesday charged a Wells Fargo investment banker and nine others for their alleged role in an insider-trading ring that earned more than $11 million by trading on tips about impending mergers. The Securities and Exchange Commission said that John Femenia, 30, misused his position at a unit of Wells Fargo to obtain material, non-public information about four different mergers involving clients. The SEC said Femenia then tipped his friend, Shawn Hegedus, a registered broker-dealer. The SEC says the two then tipped other friends, resulting in a "massive, serial insider-trading ring" that spread across five states. The SEC said it has already obtained a court order to freeze the defendants' assets. "Here you have an investment banker who clearly knew better that inside information can't form the basis of trading decisions," said William Hicks, associate director for enforcement in the SEC's Atlanta Regional Office. "Instead, he basically started

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