US Charges Investor Relations Firm Employee With Insider Trading

Tuesday, 26 Aug 2014 11:26 AM

 

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An employee of a New York investor relations firm was charged with insider trading on Tuesday, after federal authorities accused him of using nonpublic information to earn more than $538,000 in illicit profits.

Michael Lucarelli, the director of market intelligence at Lippert/Heilshorn & Associates, was arrested early Tuesday morning at his Manhattan apartment, a spokesman for the FBI said. A criminal complaint made public in federal court charged Lucarelli with 13 counts of securities fraud.

A lawyer for Lucarelli could not immediately be identified. Lucarelli did not immediately respond to a call for comment. A representative for Lippert/Heilshorn did not immediately respond to a request for comment.

Lucarelli, 51, is accused of trading in several companies that were clients of his firm, including TREX Co., FAB Universal Corp., PhotoMedex Inc., LCA-Vision Inc., Pacific Ethanol Inc., Dot Hill Systems Corp. and Lifetime Brands Inc.

Authorities said Lucarelli opened several brokerage accounts without divulging his employment at Lippert/Heilshorn, where he had access to the companies' financial announcements prior to their public release.

The trades began in August 2013 and continued until earlier this month, the complaint said.

According to the complaint, federal agents executed a search warrant of his office in July and found a draft copy of a press release from TREX containing its second quarter results dated Aug. 4, 2014 in his locked briefcase. The investigators photographed the release and returned it to the briefcase in order to keep Lucarelli unaware of the probe, the complaint said.

During the following week, one of Lucarelli's brokerage accounts purchased more than 37,000 shares of TREX; the majority of the shares were sold on Aug. 4 for a profit of nearly $90,000, the complaint said.

Authorities also said they have evidence that Lucarelli engaged in other trading in various clients of Lippert/Heilshorn that followed a similar pattern.

© 2014 Thomson/Reuters. All rights reserved.

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