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article imageToronto lawyer pleads guilty to insider trading

By Salim Jiwa     Oct 28, 2009 in Crime
A Toronto lawyer has pleaded guilty in the U.S. on a charge of insider trading that made him and another lawyer $2 million in profits. Now, Stanko Grmvosek faces a maximum jail term of five years. He has also pleaded guilty to Canadian charges.
NEW YORK- Toronto lawyer Stanko Grmovsek , 40, pleaded guilty on Wednesday in Manhattan federal court to participating in an insider trading scheme which netted more than $2 million in profits.
Separately, according to a FBI announcement, Grmovsek also pleaded guilty in Ontario Court of Justice to a charge on insider trading.
Evidence about Grmovsek in connection with insider trading was developed through "the largest criminal insider trading case in Canada's history," said FBI New York field office director Joseph M. Demarest JR.
Grmovsek pleaded guilty before U.S. District Court Judge Naomi Buchwald, the FBI press release said.
Grmovsek gathered information about company acquisitions from a law school partner and an attorney who was a partner in the Toronto office of Dorsey & Whitney , a Minneapolis-based law firm with offices throughout the United States and the world.
The partner was given the codename of CC-1 during the legal proceedings.
"From 2006 through February 2008, CC-1 misappropriated material, non-public information from Dorsey & Whitney and various of its clients," said the FBI.
"Based on his access to information about various Dorsey & Whitney clients, CC-1 obtained confidential, material, nonpublic information about at least nine acquisitions and passed the information on to Grmovsek .
Grmovsek then used that information to trade in the securities of the acquired companies on United States and Canadian-based exchanges.
From 2006 through February 2008, Grmovsek traded based on the Dorsey Inside Information that had been provided by CC-1.
"As a result, Grmovsek earned for himself and for CC-1 a total of over $2 million in illegal profits from the insider trading on the United States-based exchanges," said the FBI release.
"At today's proceeding, Grmovsek pleaded guilty to one count of conspiring to commit securities fraud. Grmovsek also separately pleaded guilty today in the Ontario Court of Justice in Toronto, Canada, to charges stemming from his insider trading activity with CC-1," said the FBI.
Grmovsek is to be sentenced on Nov. 23. He faces a maximum sentence of five years in prison.
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