A federal jury yesterday convicted a Watertown man on insider-trader charges for buying up shares of Wainwright Bank before it was acquired by Eastern Bank - based on a tip a friend who worked at Eastern wrote him on a cocktail napkin.
Robert Bray, 78, will be sentenced on May 4, the US Attorney's office in Boston reports. He faces a maximum sentence of 20 years in prison and a $5-million fine.
Prosecutors proved that:
In June 2010, Bray was tipped by a friend who was an executive at Boston-based Eastern Bank Corp. that Wainwright would be acquired. The tip - more than two weeks before the acquisition was publicly announced –- was passed on a napkin slipped to Bray over drinks at a country club bar in Watertown where both men are members. On Monday, June 14, 2010, Bray called his broker to ask how he could buy 25,000 shares of Wainwright stock, which he acknowledged "kinda sounds crazy," given how thinly the stock traded. Bray ultimately purchased a total of 31,000 Wainwright shares over the next two weeks, at prices between $8.85 and $9.90 per share, single-handedly accounting for some 56 percent of the total trading volume in Wainwright shares during that period. On June 29, 2010, Eastern Bank announced its agreement to acquire Wainwright for $19 per share in cash, a premium of nearly 100% over the stock’s prior closing price. Bray ultimately sold his shares for a profit of approximately $300,000.
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Comments
Meh, hardly among the most
By Scauma
Fri, 01/29/2016 - 12:00pm
Meh, hardly among the most heinous crimes there are to commit.
It is cool to steal as long
By Kinopio
Fri, 01/29/2016 - 3:49pm
It is cool to steal as long as you are white and you do it at a country club, right?
here ya go, buddy
By anon
Fri, 01/29/2016 - 3:58pm
https://en.wikipedia.org/wiki/Straw_man
Might have gotten away with it
By Will LaTulippe
Fri, 01/29/2016 - 12:04pm
If he had bought the shares piecemeal instead of 25K of them at once. Idiot.
Nothing in this article states he did that.
By FredQuimby
Fri, 01/29/2016 - 12:46pm
All we know is that the stock was purchased over two weeks at prices between $8.85 and $9.90 per share. It does not break down how big the chunks are.
Even if purchased in smaller chunks, it still would have raised flags given the historic trading pattern.
Using multiple different brokerage accounts would have made more sense.
Oh to have the disposable
By Poor working stiff
Fri, 01/29/2016 - 12:23pm
Oh to have the disposable income to plop down $200k on stocks
Talk about red flags
By merlinmurph
Fri, 01/29/2016 - 12:50pm
Man, that was pretty greedy buying that much. Did he really think nobody would notice?
What about the guy that tipped him?
Yup
By bosguy22
Fri, 01/29/2016 - 1:53pm
He basically bought ever share sold over the course of a week. That's just stupid.
Not sure the "tipper" would be in any trouble, as he didn't profit from the trade. If you're talking to a friend and mention that your company is being bought, that's not a crime. What is a crime is trading on that material non-public information.
Tipping is still insider trading
By tachometer
Fri, 01/29/2016 - 2:59pm
Insider trading violations can include the "tipping" of such information.
http://www.sec.gov/spotlight/insidertrading/cases....
Sure
By bosguy22
Fri, 01/29/2016 - 3:09pm
It can, if you were "tipping" that info on purpose. That's much more difficult to prosecute.
Um.
By erik g
Fri, 01/29/2016 - 3:18pm
You mean, for example, if prosecutors can prove that you passed a cocktail napkin to a friend of yours, who later made hundreds of thousands of dollars off of a really suspicious investment in a bank in which you happen to hold a high position?
Um
By bosguy22
Fri, 01/29/2016 - 3:38pm
Sure, if you're dumb enough to do that, I'd guess you'd be prosecuted. If your "tip" was made in passing on the golf course, or in the sauna, you wouldn't be.
More stupid/ignorant than greedy
By Markk02474
Sun, 01/31/2016 - 5:15am
First sign: his buddy had to write it out for him on a napkin for the 78 year old to remember.
Second sign: Nobody with any savvy would buy up so much stock they never traded before, likely had no institutional owners, and had virtually no trading volume.
Ortiz just went after an old fool to make example of - his haul was tiny by street standards.
Disgusting waste of prosecutorial resources
By anon
Fri, 01/29/2016 - 2:17pm
Great job by the despicable and truly evil Carmen Ortiz, going after a poor 78-year-old guy who caught a break that probably 9 out of 10 people would have jumped on, and who then managed to come away with a genuinely chicken-shit amount.
Same ol' publicity stunt by Carmen to try to generate publicity after going from "Bostonian of the Year" (Boston Globe Magazine) to the toilet (RIP Aaron Swartz) in one short year.
And I'm sure her target demographic is indeed thinking, "Wow, $300k! That's big time!"
If the guy ends up going to jail then Carmen will likely be able to take full credit for another needless death. Way to go, girl.
If Carmen wanted redemption (even though it's probably beyond the realm of possibility at this point), she would be wise to go after some of the real criminals in the Financial District, who are dealing in amounts far larger than this. But those cases are probably too complex for her to understand. And she'll need a job offer from those guys come January.
Some of us see it differently
By FredQuimby
Fri, 01/29/2016 - 2:32pm
I see wealthy individuals taking care of their buddies financially. Something the vast majority of us are not in on.
1% of the population controls 40% of the wealth in this country. That should frighten anybody.
cash
By Steeve
Fri, 01/29/2016 - 3:10pm
If having $300K handy wasn't a sign that this guy this guy wasn't a 1 percenter, or close to it, a quick search of the Middlesex registry of deeds yields a lot of hits for this Robert H. Bray, and just eyeballing the first 10 hits, this guy owns tens of millions worth of property. Perhaps in the hundreds given that it looks like most of his property investments happened before the property boom.
The guy is 78
By merlinmurph
Fri, 01/29/2016 - 3:33pm
That's a pretty big assumption. The guy is 78 and most likely has some bucks stashed for retirement. That hardly makes him a 1 percenter.
The real estate on the other hand.....if it's him.
Insider trading is a serious crime
By anon
Fri, 01/29/2016 - 2:33pm
Whatever you or I think about Ortiz is irrelevant. Insider trading is just another way that the 1 per- centers grow and maintain their wealth. It's against the law and it should be against the law. The age of the alleged perp is also irrelevant
Wholeheartedly agree
By Ahab
Fri, 01/29/2016 - 2:41pm
She's a she-devil and an oversaturated, all-talk and all flex POS. After reading how she attacked Aaron Schwartz, who would have any respect for her? Poor guy
No.
By erik g
Fri, 01/29/2016 - 3:17pm
When someone breaks into my house and steals my TV and smart phone, they profit by $1 or $2K. When someone uses insider info to manipulate stock prices, they make hundreds of thousands of dollars. That wealth isn't manufactured out of thin air; it comes out of the pockets of other investors, or people's 401(k) plans. If you let the white collar crime go long enough, and show wealthy people that you aren't going to prosecute them if they break the law, then you get Lehman Brothers. I know who I'd rather see prosecuted. Throw the book as this asshole, and maybe the incredibly wealthy will stop trying to extract wealth from the rest of us.
You attempting to turn this around and blame the prosecutor for causing harm to the inside trader is the most disgusting things I've read today, and that's on a day where every news outlet has written 5000 words about the GOP debates.
Um
By bosguy22
Fri, 01/29/2016 - 3:40pm
Please explain how this man's profits came out of someone else's 401k?
Wall Street
By Steeve
Fri, 01/29/2016 - 10:18pm
Apparently the "zero sum" bit from Gordon Gekko's speech was lost on you, wasn't it?
Pretty gross how your type
By Kinopio
Fri, 01/29/2016 - 3:54pm
Pretty gross how your type gets up in arms over people who steal food from convenience stores yet think people like this guy who try to get away with six or seven figures should be left alone on their yachts that they paid for with money they didn't earn. This guy is a huge crook, plain and simple.
Poor Guys
By APB
Sat, 01/30/2016 - 10:44pm
... don't hang out in country clubs.
His mistake
By anon
Fri, 01/29/2016 - 5:41pm
Not buying a billion dollars worth of shares.
Because then he'd be too big to fail.
(When are the banksters going to jail?)
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