Former Eastern Bank Executive Charged with Insider Trading

A former Eastern Bank executive has been charged with insider trading in connection with the Boston bank's 2010 purchase of Wainwright Bank & Trust.

The Securities and Exchange Commission charged Patrick O'Neill and a friend, Robert Bray, with fraud and violations of securities laws. The SEC said it would seek recovery of "ill-gotten gains," plus interest and financial penalties, and permanent injunctions against the men.

O'Neill and Bray allegedly acquired Wainwright shares when O'Neill learned about the deal through his job as a senior vice president at Eastern. O'Neill and Bray bought shares of Boston-based Wainwright in the two weeks before the deal was announced. Eastern, an $8.7 billion-asset mutual, closed its acquisition of Wainwright in November 2010.

O'Neill quit his job at Eastern rather than respond to federal regulators' inquiries about the purchases of Wainwright stock, the SEC said. O'Neill and Bray were later subpoenaed as part of the SEC's investigation, but the men asserted their Fifth Amendment privileges in response to all questions, "including whether they know one another," the SEC said in a statement.

The Justice Department has filed criminal charges against O'Neill, the SEC said.