Indonesian engaged in insider trading
Indonesian engaged in insider trading
WASHINGTON (Dow Jones): In a case arising from the insider- trading investigation of ex-J.P. Morgan analyst-trainee Roy Handojo, a former analyst for Salomon Smith Barney Inc. Thursday settled allegations he passed insider information to Handojo on a proposed utility merger.
Anindya N. Bakrie, 23, asked his friend Handojo to buy stock in Washington Gas Light Co. in September 1997, after learning of a proposed merger of the company with Consolidated Natural Gas Co, according to a Securities and Exchange Commission complaint.
Handojo, who is serving a 15-month prison term for other insider trading crimes, bought US$650,000 worth of Washington Gas stock based on this information, but he ended up losing $13,869 on the trade when the merger talks were called off a few days later.
Anindya, who like Handojo is an Indonesian national, has returned to that country. Anindya was an analyst with Salomon's Global Power Group from June 1996 to September 1997, when he returned to Indonesia.
SEC investigators found that Anindya had performed limited work on the proposed merger in August 1997. Handojo bought into Washington Gas stock on Sept. 5, but Anindya advised his friend two days later that the merger no longer appeared likely. Handojo incurred his $13,869 loss when he sold the stock on Sept. 8 and 9.
Three days later, Handojo was arrested in New York for a slew of other insider trading charges, including allegations he profited by trading on confidential information on the mergers of NationsBank Corp. (NB) and Barnett Banking Inc.; Signet Banking Corp. and First Union Corp. (FTU); and Household International Inc. (HI) and ACC Consumer Financial Corp.
In March, Handojo was sentenced to 15 months in federal prison. The SEC has submitted to a judge a proposed settlement of civil charges in which Handojo would repay roughly $580,000 in illegal profits.
As part of the settlement, Anindya agreed to be enjoined from any future violations of U.S. securities law. He neither admitted nor denied liability. He was also ordered to pay $40,000 civil penalty.
A Salomon spokesman said. "We fully support the SEC's action."