NASDAQ former executive jailed after using wifes web login for insider trading
Donald Johnson generated £392,000 from illegal trades
Tue, August 16, 2011
Computerworld UK — Donald Johnson, a former executive at the NASDAQ stock exchange in New York, has been handed a three and a half year sentence after using his wife's online brokerage account for insider trading.
The 56 year old has expressed remorse after using the account on his work PC to make $640,000 (392,000) in illegal trades. He pleaded guilty in a Virginia court in May.
Johnson, as managing director on the stock exchange's market intelligence desk, had access to earnings and product launch data before it was made public. He admitted having used that information to make illegal trades on eight occasions between 2006 and 2009 before he retired.
"Don Johnson used sensitive, confidential information as an executive at NASDAQ to pad his retirement by more than $600,000," said US attorney Neil McBride earlier this year.
"He thought he could get away with it by using his wife's account and inside information to make relatively small trades just a few times a year. But he learned what every other trader on Wall Street must now realise: We're watching."
Johnson had also violated NASDAQ company policy by failing to inform the exchange of his wife's trading account, the Department of Justice said this week.
In one instance in 2007, Johnson used inside information on successful drug trial results - by manufacturer United Therapeutics - to buy shares before the results were announced. Soon after the announcement, Johnson sold the shares and gained more than $175,000 in profits.
Johnson apologised for his actions, telling the judge: "I'll shoulder the remorse for the remainder of my life".
US regulator the Securities and Exchange Commission has filed a civil lawsuit.