U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18433 / October 29, 2003
UNITED STATES OF AMERICA, Appellee, v. RICHARD A. SVOBODA, Defendant, MICHAEL A. ROBLES, Defendant-Appellant (2d Circuit, October 24, 2003).
Securities and Exchange Commission v. Richard A. Svoboda and Michael A. Robles 00 Civ. No. 8557 (MBM) (Southern District of New York) (filed November 7, 2000)
SECOND CIRCUIT COURT OF APPEALS AFFIRMS INSIDER TRADING CONVICTION OF CERTIFIED PUBLIC ACCOUNTANT
On October 24, 2003, the United States Court of Appeals for the Second Circuit affirmed a federal jury's conviction of Dallas, Texas certified public accountant Michael A. Robles. In October 2002, the jury found Robles guilty on charges of participating in a massive insider-trading scheme that yielded illegal profits of more than $1.3 million in 31 different stocks. According to the evidence at trial, from 1995 through 1997, Robles received inside information from his long-time friend Richard A. Svoboda, who was employed as a credit policy officer at NationsBank, N.A. In violation of NationsBank's policies, Svoboda misappropriated confidential information about yet-to-be-announced tender offers or financial results. The jury convicted Robles of one count of conspiracy, 9 counts of securities fraud and 4 counts of tender offer fraud. The Honorable Richard N. Berman, United States District Judge for the Southern District of New York, sentenced Robles to be incarcerated for 41 months, and to pay a $300,000 fine.
In February 2002, Svoboda pleaded guilty to conspiracy, securities fraud, and tender offer fraud charges. Judge Berman sentenced Svoboda to be incarcerated for 12 months and one day, and to pay a $200,000 fine.
The Commission's civil action against Robles and Svoboda, filed at the same time a grand jury in the Southern District of New York indicted them, was stayed pending the outcome of the criminal trial. Once the stay is lifted, the Commission intends to pursue its claims against Robles and Svoboda, for engaging in illegal insider trading in violation of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 14(e) of the Securities Exchange Act of 1934, and Exchange Act Rules 10b-5 and 14e-3, and to seek injunctive relief, disgorgement, and civil money penalties.