IBM exec accused of insider trading
Caught on tape
An IBM exec was today accused of insider trading after his broker allegedly taped him bragging about his exploits.
Stephen Cowley, 37 years old and a VP of IBM's software arm, is accused of making $127,000 illegally from the deal.
The Securities and Exchange Commission is not happy, claiming in a civil complaint that Cowley, who lives in Surrey, discovered confidential information about London-based company 4Front Technologies. He bought 8000 shares in the outfit three weeks before it announced its sale to NCR for $250 million cash in August.
But he blabbed to his broker at Salomon Smith Barney in New York - who swiftly taped the conversation.
Cowley answered "affirmatively" when the broker asked if he "knew something" after he bought the 4Front shares on 11 July, the SEC claims.
"Cowley revealed his highly specific knowledge of material nonpublic information in a series of tape-recorded conversations that he had with his broker when he purchased his 4Front securities," stated the complaint.
The SEC didn't reveal how Cowley came by the knowledge, and also kept the identity of the trader taper secret. ®