A Ladera Ranch man is expected to surrender to federal authorities this afternoon to face charges connected to an insider trading scheme in which he and four others allegedly used
confidential information obtained from two investor relations firms to
generate more than $1.7 million in illegal profits.
Ahmad Noory, a 35-year-old former Investor Relations
International employee and current operator of Beverly Hills investor
relations firm Nexus Investor Relations, is accused of earning at least
$78,000 in illegal profits through the conspiracy, according to an indictment handed down by a federal grand jury Wednesday afternoon.
He could receive 45 years in the federal pen if convicted of the one count of conspiracy and two counts of securities fraud he has been charged with.
Noory's initial court appearance will be scheduled after he turns himself in, according to a U.S. Department of Justice statement, which follows after the jump . . .
March 31, 2010
Charged in Insider Trading Ring That Generated More Than $1.7 Million
in Illegal Profits
agents with the FBI this morning arrested two of five defendants
charged in an insider trading scheme in which the participants secretly
used confidential information obtained from two investor relations
firms to generate more than $1.7 million in illegal profits.
Ahmad Haris Tajyar, 34, of Encino, was
arrested without incident at his residence after being indicted for his
role in two separate insider trading conspiracies. The first
conspiracy involved trades based on confidential information obtained
from an insider at the New York-based investor relations firm Lippert
Heilshorn. The second conspiracy involved trades based on confidential
information from clients of Haris Tajyar's own investor relations firm,
which was based in San Fernando Valley.
The second person arrested today was Zachary
Bryant, 39, of Stamford, Connecticut, who previously worked as an
account executive and vice president in the Los Angeles office of
Lippert Heilshorn & Associates.
A federal grand jury returned an indictment
against four defendants yesterday afternoon. The indictment, as well as
a criminal information filed against a fifth defendant, outline how
the conspirators secretly obtained inside information in advance of
upcoming press releases and used that information to generate hundreds
of thousands of dollars in illegal profits before the news was
announced to the public.
Those charged in the scheme are:
Ahmad Haris Tajyar, the owner and president of
the Sherman Oaks-based Investor Relations International, Inc., who
allegedly made more than $1 million in illegal profits from his insider
Zachary Bryant, who allegedly provided
confidential information to Haris Tajyar;
Omar Tajyar, 30, of Porter Ranch, a cousin of
Haris Tajyar who previously worked at Investor Relations International
and who allegedly made more than $300,000 in illegal profits from
trades based on inside information;
Ahmad Noory, 35, of Ladera Ranch, a former
Investor Relations International employee and current operator of a
Beverly Hills investor relations firm, Nexus Investor Relations, who
alleged earned at least $78,000 in illegal profits through insider
trading as part of the conspiracy; and
Vispi Shroff, 57, of Canyon Country, who has
admitted receiving more than $165,000 in illegal profits, in part from
allowing Haris Tajyar to use his investment account to buy and sell
stocks, with the agreement that they would split the profits from those
The indictment alleges that while Bryant
worked at Lippert Heilshorn, he secretly disclosed information to Haris
Tajyar about upcoming press releases for the firm's investor relations
clients, including information related to press releases for Connetics
Corporation; Medivation, Inc.; and Halozyme Therapeutics, Inc. Haris
Tajyar is accused of illegally profiting from this information by
trading in securities of those companies immediately before the
announcements were made. The indictment also alleges that Haris Tajyar
in turn disclosed the inside information from Bryant about the upcoming
press releases to Omar Tajyar, Noory, and Shroff, who also traded
immediately in advance of the press releases. After the press releases
were issued and the market reacted to the news, the conspirators
quickly closed out trading positions, reaping huge profits in a short
period of time, typically one or two days.
Haris Tajyar is also charged in a second
scheme involving confidential information from the clients of his
investor relations firm, Investor Relations International. The
indictment alleges that as part of this scheme, Haris Tajyar told
Shroff about an upcoming press release for one of the firm's clients, LJ
International, a jewelry manufacturer, designer, and retailer based in
Hong Kong. Haris Tajyar then used one of Shroff's investment accounts
to buy tens of thousands of shares of LJ International before the press
release was issued, and Shroff separately bought shares of LJ
International as well. After Haris Tajyar and Investor Relations
International issued the press release for LJ International, Haris
Tajyar, and Shroff sold their shares for a combined profit of over
“Everyone involved in the financial industry
has fiduciary and ethical duties, but in this case those
responsibilities were ignored in favor of profits derived from illegal
stock trading,” said United States Attorney André Birotte Jr.
“Prosecuting violations of those duties helps to maintain the integrity
of America's financial system and to ensure that the public is able to
maintain a high degree of trust when trading in the financial markets.”
Haris Tajyar is expected to make his initial
court appearance this afternoon in United States District Court in Los
Angeles. Bryant made his initial court appearance this morning in
United States District Court in Connecticut and agreed to appear in Los
Angeles federal court for an arraignment on Monday. Omar Tajyar and
Noory are expected to surrender to authorities this afternoon and then
make their initial court appearances. Shroff has entered into a plea
agreement with the government and has agreed to appear in United States
District Court in Los Angeles on April 12.
An indictment contains allegations that a
defendant has committed a crime. Every defendant is presumed to be
innocent until proven guilty.
Haris Tajyar is charged in the indictment
with two counts of conspiracy to commit securities fraud and 13 counts
of securities fraud. Bryant is charged with one count of conspiracy and
13 counts of securities fraud. Omar Tajyar is charged with one count
of conspiracy and four counts of securities fraud. Noory is charged
with one count of conspiracy and two counts of securities fraud.
The charge of conspiracy to commit securities
fraud carries a maximum statutory penalty of five years in federal
prison. Each count of securities fraud carries a statutory maximum
sentence of 20 years in federal prison.
If they are convicted of all the charges in
the indictment, Haris Tajyar would face a statutory maximum sentence of
270 years in federal prison, Bryant would face a maximum sentence of
265 years in federal prison, Omar Tajyar would face a maximum sentence
of 85 years in federal prison, and Noory would face a maximum sentence
of 45 years in federal prison.
Shroff has agreed to plead guilty to two
counts of securities fraud. Once he pleads guilty, Shroff will face a
statutory maximum penalty of 40 years in federal prison.
This insider trading case is part of an
ongoing investigation by the Federal Bureau of Investigation.
In June 2009, The United States Securities and Exchange Commission filed
a civil complaint against Haris Tajyar, Bryant, Omar Tajyar, and
Shroff that accuses them of insider trading (see: http://www.sec.gov/litigation/litreleases/2009/lr21069.htm).