Stock trading account

A California lawyer has agreed to plead guilty to charges that he lost more than $2 million in settlement money after investing it in bad stock market trades.Sandeep Baweja will plead guilty to wire fraud and obstruction of justice, prosecutors told the San Jose Mercury News. He could be sentenced to up to 30 years in prison, but is likely to receive a lower sentence, his lawyer told the Orange County Register.Prosecutors claim Baweja lost the money after obtaining a $3.5 million class action settlement, $2.5 million of which was to be paid to the plaintiffs, employees of ZipRealty Inc. Instead, Baweja allegedly put the money in a trading account. Baweja was “an admitted novice at stock investments,” the Register says, but he “nevertheless decided to play the market in the midst of its 2008 summer free fall.”After claimaints began asking about their settlement money, Baweja reported he had lost it.Baweja was active in political and professional activities and … [Read more...] about Lawyer to Plead Guilty to Losing $2M Due Clients on Bad Stock Trades

A California lawyer has withdrawn as counsel in a class action after admitting in court papers that he lost most of the $2.7 million settlement in bad stock trades.The money was supposed to be distributed to 800 class members who sued ZipRealty, but Irvine lawyer Sandeep Baweja has said he placed it in an Ameritrade brokerage account last spring, the Daily Journal reports (sub. req.). Court papers say Baweja lost all but about $54,000 because of bad investments and the stock market downturn, according to the story.Baweja said nothing about the case yesterday as he appeared with his wife in a Los Angeles courtroom before U.S. District Judge S. James Otero, the story says. “I’m extremely, extremely disappointed in what occurred here,” Otero said, “but my disappointment pales in comparison to the class.’”Baweja’s lawyer, Jeffrey Rutherford of Crowell & Moring, said Baweja had borrowed about $560,000 from friends and family in an effort to pay … [Read more...] about Lawyer Admits Bad Stock Trades Cost Most of $2.7M Class Settlement

10b5-1 trading plans can be a valuable tool in wealth building by permitting an executive to trade in employer stock during blackouts, particularly for executives who may be in a virtually perpetual blackout. The plans can also be used as a way to satisfy exercise prices and tax obligations on equity awards. Business PointGiven that an executive must enter into a 10b5-1 trading plan in “good faith” and “not as part of a plan or scheme to evade”1 insider trading restrictions, the executive should take into account best practices regarding the implementation of such plans to increase the chances that the Rule 10b5-1 affirmative defense to insider trading applies to trades under the plan. Technical PointsBelow is a list of some best practices for executives to consider with respect to 10b5-1 trading plans:Review the issuer’s insider trading and hedging policies, and stock ownership guidelines.Determine whether (i) the issuer must approve the form of … [Read more...] about Maximizing Opportunities During Employer Stock Trading Blackouts: 10b5-1 Trading Plan Best Practices

Insider trading cases often have focused on “the CEO’s brother-in-law” or similarly situated individuals who used a tidbit passed along at Thanksgiving dinner to make a quick and easy personal profit. Today, hedge funds have joined “the CEO’s brother-in-law” as the target of insider trading cases. In the hedge fund context, charges are being based on a hedge fund employee’s collection of information as part of the employee’s job in trading the hedge fund’s assets, unlike the classic cases based upon receipt of an isolated “tip” outside of the work setting that will be used to generate profit for an individual.Evidence tying the trades to “insiders” -- the source for inside information about Akamai was an Akamai executive; the source for the inside information about Clearwire was an executive at a company that was investing in Clearwire.  Evidence tying the trades to the “inside … [Read more...] about Hedge Funds Join “the CEO’s Brother-in-Law” as the Target of Insider Trading Cases

As the result of the automatic investment of dividends and short-term interest earned in his 401(k) account and through vesting of restricted stock units awarded as part of his compensation, Comcast CEO Brian Roberts was charged with and recently settled claims with the DOJ Antitrust Division for violations of the notification requirements in the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”). Roberts paid a civil penalty of $500,000 to settle claims that he was in continuing violation of the HSR Act from October 2007 through September 2009.The HSR Act requires all persons contemplating mergers or acquisitions of voting securities, assets or noncorporate interests meeting specified size thresholds to notify the FTC and DOJ Antitrust Division about the transaction and observe a waiting period before closing the transaction. Currently, the minimum size-of-transaction threshold is $66 million. The statutory civil penalty for failure to comply with the HSR … [Read more...] about Warning to Executives: Reinvestment of Dividends in your 401(k) and Vesting of Stock Awards May Trigger HSR Filing Requirements