Sherif Mityas pleaded guilty today to a securities fraud charge in connection with a stock purchase he made while in possession of confidential information. The proceedings were held before United States Magistrate Judge Joan M. Azrack at the United States Courthouse in Brooklyn, New York.
The guilty pleas were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Janice K. Fedarcyk, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.
According to the charging documents and other court filings, the defendant is a consultant who was hired to advise Carlyle Group on its multi-billion-dollar acquisition of NBTY, a publicly traded company headquartered in Ronkonkoma, New York. Shortly after being engaged by Carlyle, the defendant transferred a large sum of money to a stock brokerage account that he controlled and purchased more than 1,000 NBTY shares. On the morning of July 15, 2010, Carlyle issued a press release announcing its $3.8 billion acquisition of NBTY, causing NBTY’s share price to rise substantially. That same morning, the defendant sold his NBTY shares for a large profit.
“Insider trading is an insidious crime which undermines investor confidence in the integrity of our securities markets” stated United States Attorney Lynch. “Mityas was entrusted with confidential information in his role as a business consultant and grossly abused that trust by secretly profiting on illegal trading activity. As this case demonstrates, we will not tolerate people using inside information to line their own pockets and harm investors who play by the rules.” Ms. Lynch expressed her grateful appreciation to the FBI, the agency responsible for leading the government’s investigation, and thanked the United States Securities and Exchange Commission for its assistance.
The defendant faces a maximum sentence of 20 years’ imprisonment on the securities fraud conviction.
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