NEW YORK - A temporary worker at Goldman Sachs & Co. and Credit Suisse First Boston passed on confidential information about 23 mergers and other transactions to friends and investors he met in an Internet chat room, federal prosecutors said Tuesday.
In a case authorities call "one of the largest insider trading schemes ever prosecuted," U.S. Attorney Mary Jo White said John Freeman gained access to inside information as a part-time computer graphics worker at the two companies. Those assignments required him to create or revise documents related to mergers, prosecutors said.
In all, 19 defendants are accused of earning $8.4 million from the 23 transactions. Among them were investors Mr. Freeman met in a chat room run by America Online Inc., prosecutors said. Some were friends who worked with Mr. Freeman at another job at Philip Morris Cos., according to prosecutors, and another defendant, Bradley Burke, also worked at Credit Suisse.
"The inside information traveled quickly," prosecutors said in a criminal complaint. Twenty-four people bought "options in the target companies of these deals," prosecutors said in the complaint, though not all of those people were charged in the case.
Mr. Freeman worked at Goldman Sachs from May 1997 to June 1998 and at Credit Suisse from October 1998 until January of this year, prosecutors said. A spokesman for Credit Suisse did not immediately return a call. A spokeswoman for Goldman Sachs declined to comment until after a press conference by the U.S. Attorney.
- Bloomberg News