A former stockbroker from New Jersey has been charged with allegedly making profits of more than $3 million from insider trading, US Attorney Philip R. Selinger said.
Prosecutors said Christopher Mattai, 44, of Brill, who was working as a partner and senior sales representative at a brokerage and dealer firm at the time, was charged Thursday with conspiracy to commit securities fraud and securities fraud.
Maathai traded in private takeover companies, or SPACS, based on non-public information he received from a friend who worked for a Canadian asset management firm, according to the criminal complaint.
The SEC defines a SPAC as a shell company that completes an initial public offering without any commercial operations. Its sole purpose is to identify a target operating company before orchestrating a merger deal, according to the commission.
Authorities said Maathai initiated the deals between May 2020 and February 2021 and generated about $3.4 million in profits.
The complaint said the defendant co-conspirator received information about the confidential merger refusal due to their company being a potential investor in the SPAC deals. The co-conspirator notified Mathi when a security was added to his company’s confidential restricted list, and Mathi then purchased the securities using his brokerage account, officials allege.
Mattai also paid for a luxury trip to St. Barthelemy with the conspirators and their families as they continued to engage in the scheme, according to court documents.
“As alleged, Christopher Mattai illegally exploited his relationship with a close friend to gain access to classified information about mergers and acquisitions that have not yet been made public involving Special Purpose Acquisition Companies, or SPACs,” said U.S. Attorney Selinger. “Maathai allegedly conducted deals in seven SPAC companies that netted him $3.4 million in illegal profits. SPACs may have been a hot trend on Wall Street, but the province of NJ will continue relentlessly to bring inside traders to justice, no matter what market trends.”
The SEC also filed a civil complaint against the defendant on Thursday.
Mattai’s attorneys, James Lundy and Christopher DeGennaro of Foley & Lardner LLP, did not immediately respond to requests for comment Thursday night.
The US Attorney’s office said Maathai appeared before a Newark federal court judge after his arrest on Thursday and was released on $250,000 unsecured bail.
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Nicholas Fernandez can be reached at [email protected].