Louisiana investors might have heard about an ongoing federal investigation of securities fraud based on insider trading involving the sale of The Shaw Group in 2012. Federal prosecutors have filed a federal securities fraud charge against a 10th man, the brother-in-law of a vice president at the company. He also faces a charge of securities fraud conspiracy.
According to the federal indictment, the man participated in the securities fraud scheme during or before July 2012, profiting from inside details that his brother-in-law obtained about the upcoming transaction. The information was reportedly obtained before news of the acquisition was made public on July 30, 2012.
The pair allegedly purchased stock in The Shaw Group prior to the public announcement and sold them for much more at the expense of existing and potential shareholders who were not privy to the information. The indictment claims that the accused man earned more than $650,000 through the scheme. If he is convicted, he faces fines, restitution and prison time.
The man's brother-in-law already pleaded guilty to related charges in June 2014. In addition to these two men, a former investment banker at Wells Fargo and seven conspirators have been convicted of federal charges partially related to the $3 billion sale. Those convictions resulted in prison sentences.
Someone who is accused of securities fraud or another type of white collar crime can face heavy penalties if convicted, including imprisonment and fines. Defendants in this situation will often retain criminal defense attorneys to help them protect their rights. The attorneys could discuss the need for forensic accountants, computer analysts, fraud examiners and other experts to discredit the prosecutors' evidence.
Source: Nola.com, "Shaw Group insider trading allegations lead to another federal indictment," Emily Lane, Feb. 20, 2015