U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23539 / May 13, 2016
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. 1:14-cr-10356-WGY (D. Mass.)
United States v. John Patrick O'Neill, Criminal Action No. 1:14-cr-10317-WGY (D. Mass.)
Boston-Area Defendant in SEC Insider Trading Case Sentenced to Two Years' Imprisonment
The Securities and Exchange Commission announced today that on May 9, 2016, Watertown, Massachusetts real-estate developer Robert H. Bray was sentenced by U.S. District Judge William G. Young to two years in prison, three years of supervised release, and ordered to pay forfeiture of $299,762.15 and a fine of $1 million in a criminal action for insider trading. The SEC also announced that on May 12, 2016, J. Patrick O'Neill of Belmont, Massachusetts was sentenced to one-year probation in a related criminal action.
On January 28, 2016, a jury in the federal court in Boston, Massachusetts, returned a guilty verdict against Bray, convicting him of engaging in securities fraud through insider trading. O'Neill, a cooperating witness who testified during Bray's trial, previously pled guilty to a criminal charge of conspiracy to commit securities fraud.
The criminal cases against Bray and O'Neill were based on the same conduct underlying the SEC's civil action, which was filed on August 18, 2014. The SEC's complaint alleged that 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 ("Wainwright") 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 is pending, seeks injunctions against both defendants from further violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks to have them be enjoined, disgorgement of allegedly ill-gotten gains with interest, and civil penalties of up to three times the gain.
The SEC thanks the U.S. Attorney's Office for the District of Massachusetts for its efforts in prosecuting the case and recognizes the valuable assistance of the Boston Field Office of the Federal Bureau of Investigation.
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].