A former Wells Fargo & Co. investment banker is among nine people charged with taking part in an insider-trading conspiracy that brought in $11 million in illegal gains from tips on pending mergers.
John Femenia, 31, is accused of misusing his position at Wells Fargo Securities Llc to get information about transactions involving the firm's clients and turning the data over to others in exchange for kickbacks of cash and gold, according to an indictment unsealed yesterday in federal court in Charlotte, N.C. Six of those charged will plead guilty, the Justice Department said in an emailed statement.
Femenia worked in San Francisco-based Wells Fargo's Charlotte office when most of the activity allegedly occurred and later in New York, where he lives now, according to the U.S. Securities and Exchange Commission, which filed a civil case against Femenia in Charlotte on Dec. 5. He was arrested yesterday in New York.
From March 2010 until December, the defendants stole nonpublic information about upcoming corporate mergers and acquisitions from Wells Fargo and its clients, according to the indictment.
"Wells Fargo has robust policies and training programs on the handling of confidential information, and we have a zero-tolerance policy for the misuse of such information," said spokeswoman Elise Wilkinson. Femenia is no longer employed at Wells Fargo, and it is assisting the SEC and U.S. Attorney with their actions, she said.
Femenia passed inside information to friends, the indictment says, and it spread to connections in five states. He is also charged with wire fraud conspiracy, mortgage fraud and money laundering conspiracy. Femenia was released on a $1.25-million bond.