Big Blue secretary busted for insider trading
Saw details of Lotus takeover while photocopying and told all her friends
An IBM secretary, who saw details of an upcoming takeover deal when photocopying documents, is being sued after she and a group of friends netted $1.3 million. Through Lorraine Cassano the gossip spread to 25 people, including a pizza man, a gynaecologist and an ex-teacher, all of who now stand accused of making profits from insider dealing. The Securities & Exchange Commission (SEC) is hot on the trail of the group, many of them first-time investors, according to today's Daily Telegraph newspaper. The US body alleges that Cassano whispered confidential details of IBM's impending acquisition of Lotus, discovered in the New York office, to her beeper-salesman husband in May 1995. Mr Cassano then tipped off colleague Paul Green in a New Jersey hotel room three days before the deal was due to be announced. Seemingly unable to keep his trap shut, Mr Cassano also blabbed to computer technician Jerry Mazzone. Both agreed to buy Lotus stock and split profits with Mr Cassano. From there, the news spread like wildfire, and within six hours 25 people had bought $500,000 of Lotus shares. These included a pizzeria owner, a dairy wholesaler, a banker, a solicitor and a stockbroker. They picked up $1.3 million when Lotus shares nearly doubled on the deal's announcement. The SEC has filed a suit against all 25, but has already settled with several, including the Cassanos. They have been forced to not only give back their profits, but also pay penalties representing double their gains. An IBM representative told The Register: "We're very careful that this kind of confidential information is not disclosed by staff. "We do not encourage this kind of activity." Former teacher Josephine DeCiccio, who allegedly netted $48,000 from the deal, claimed she was an innocent victim. "I had no idea I was doing anything wrong. You could have overheard something in the grocery store and have had no idea that you could wind up in SEC headquarters." ®
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