[ by Howard Haykin ]

An ex-broker with First Midwest Securities in Garden City, NY, who currently works for Merrill Lynch, was arrested Wednesday morning at his home in Oceanside, NY, by FBI agents.  He is charged with insider trading and, after appearing before a U.S. Magistrate Judge in Brooklyn federal court, he was released on a $100,000 personal recognizance bond. 

Professional Profile of Defendant.   The CRD shows Damian Perna's work experience only from March 2003 - and we cannot ascertain whether he had prior experience in the securities industry.  In any case, after working for 2 firms between March 2003 and September 2005 - Nationwide Capital and Mainstreet Funding - he left the industry for 4 years.

In May 2009, Perna returned to the industry as a broker with First Midwest Securities.  He remained there until August 2012, when he moved over to Merrill Lynch, also in Garden City.
 

Findings and Allegations.   It's alleged that Perna, from June 2011 to October 2012, conspired with others to profit off of insider information.  In court papers, Perna is accused of obtaining draft earnings reports for listed companies prior to their release to the public. The apparent source of the reports was an investor relations firm, whose clients included Consolidated Graphics, Alamo Group, Miller Industries, and Innophops Holdings

It's not clear from available information whether Damian and his supposed co-conspirators personally trading on the insider information, or whether they passed it along to others for a fee. 

Damian Perna's insider information scheme came to an end when he sold an advanced copy of an earnings report for involvement concluded when he sold an advanced copy of an earnings report for $7,000 to an undercover FBI agent.  The investigation continues.

Indictment.   Perna, charged with conspiracy to commit insider trading, faces 25 years in prison if convicted, said Robert Nardoza, a spokesman for U.S. Attorney Loretta Lynch in Brooklyn.  The government’s case is being prosecuted by Assistant U.S. Attorneys Cristina Posa and Ilene Jaroslaw.

This case was brought in coordination with President Obama’s Financial Fraud Enforcement Task Force.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, please visit www.stopfraud.gov.

The case is U.S. v. Perna, 13-cr-00103, U.S. District Court, Eastern District of New York (Brooklyn).

[Bloomberg, 2/28/13] and [New 2000.com. 2/27/13]