Dead Insider Trading Suspect's Pal Pleads In NYC

Dead Insider Trading Suspect's Pal Pleads In NYC - 10/29/2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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Dead Insider Trading Suspect's Pal Pleads In NYC
Larry Neumeister

Associated Press. October 29, 2009
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EXCERPT: A longtime friend of a Canadian lawyer who apparently committed suicide this week after he was accused in the largest insider trading case in Canada's history has pleaded guilty to criminal charges related to the scheme. Stanko Grmovsek, 40, of Ontario, also an attorney, pleaded guilty Tuesday in a deal with prosecutors in U.S. District Court in Manhattan to conspiracy to commit securities fraud. The agreement calls for a sentence of between three and four years in prison. U.S. authorities say the scheme resulted in nearly $10 million in profits, though Canadian authorities estimated profits at about $9 million. The plea came a day after Grmovsek's longtime friend Gil Cornblum was found dead in Toronto. The Globe and Mail in Toronto reported that Cornblum killed himself and quoted his wife as saying the death was the "culmination of a lifelong battle with severe depression." Assistant U.S. Attorney Raymond Lohier said Grmovsek pleaded guilty to similar charges in Toronto earlier Tuesday. In a release, U.S. prosecutors said the New York charges related to illegal trades that made more than $2 million in profits. They said the charges stemmed from a case announced by the Royal Canadian Mounted Police as the largest criminal insider trading scheme in Canada's history. The U.S. Securities and Exchange Commission also announced that Grmovsek had settled charges it brought against him for civil violations of securities laws. It said he had agreed to pay back $8.5 million of illegal gains but would be able to pay only $1.5 million because of his financial condition. The SEC said the scheme involved trading in both U.S. and Canadian markets from 1994 to 1998 and from 2004 to 2008.

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