U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23764 / March 3, 2017
Securities and Exchange Commission v. J. Patrick O'Neill and Robert H. Bray, No. 1:14-cv-13381-ADB (D. Mass. filed Aug. 18, 2014)
United States v. Robert H. Bray, No. 16-1579 (1st Cir.)
First Circuit Affirms Federal Criminal Conviction Against Boston-Area Defendant Accused of Insider Trading
On February 24, 2017, the U.S. Court of Appeals for the First Circuit affirmed a jury verdict in a criminal action finding Watertown, Massachusetts real-estate developer Robert H. Bray guilty of securities fraud through insider trading.
On January 28, 2016, a jury in the federal court in Boston, Massachusetts returned a guilty verdict against Bray. On May 9, 2016, U.S. District Judge William G. Young sentenced Bray to two years in prison, three years of supervised release, and ordered him to pay forfeiture of $299,762.15 and a fine of $1 million in the criminal action. Bray subsequently appealed the conviction.
The criminal case against Bray was based on the same conduct underlying the SEC's civil action, which was filed on August 18, 2014. The SEC's complaint alleged that J. Patrick O'Neill, a former senior vice president at Eastern Bank Corporation, learned through his job responsibilities that his employer was planning to acquire Wainwright Bank & Trust Company and he then tipped Bray, a friend and fellow golfer with whom he socialized at a local country club. In the two weeks preceding a public announcement about the planned acquisition, Bray sold his shares in other stocks to accumulate funds he used to purchase Wainwright securities. Bray had never previously purchased Wainwright stock. After the public announcement of the acquisition caused Wainwright's stock price to increase nearly 100 percent, Bray sold all of his shares during the next few months for nearly $300,000 in illicit profits.
The SEC's action, which remains pending against Bray, seeks an injunction from further violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, disgorgement of allegedly ill-gotten gains with interest, and civil penalties of up to three times the gain. O'Neill previously agreed to settle the SEC's allegations against him by consenting to the entry of a final judgment that permanently enjoined him from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The court entered a final judgment against O'Neill on August 18, 2016.
For further information, see Litigation Release Nos. 23070 (Aug. 18, 2014) [Civil Complaint] 23131 (Nov. 14, 2014) [Bray arrest]; 23150 (Dec. 5, 2014) [O'Neill guilty plea]; 23456 (Jan. 29, 2016) [Bray guilty verdict]; 23539 (May 13, 2016) [Bray sentence]; 23621 (Aug. 18, 2016) [O'Neill final judgment].