UPDATE: CBOE Founding Member Pleads Guilty To Obstruction
At a hearing Tuesday, Elliot Joel Smith entered his plea before U.S. District Judge George B. Daniels in Manhattan.
A lawyer for Smith declined comment Tuesday.
Smith, 76 years old, faces up to five years in prison on the obstruction of justice charge. Sentencing is set for March 18.
Smith was a founding member and director of the CBOE from 1972 to 1975. He also had previously been a director of the American Stock Exchange and a founding member and chairman of the AMEX Commodities Exchange.
Prosecutors alleged that Smith, who was a managing director at Broadband Capital Management LLC at the time, provided the SEC with fake memorandums and exhibits in connection with the regulator's probe into possible insider trading. He provided false testimony to the SEC on at least one occasion in 2004, prosecutors said.
The government also alleged that Smith, of New York, asked his administrative assistant, who had worked for him for 17 years, to lie about the source of one memo and its attachments in April 2006. The obstruction of justice occurred between December 2003 and April 2006, prosecutors said.
Last year, Elliot Smith and his son, Gregg Ashley Smith, a former Banc of America Securities investment banker, agreed to settle insider-trading allegations by the SEC in connection with several private investment in public equity, or PIPE, transactions. They settled the case without admitting or denying wrongdoing and agreed to pay disgorgement and civil penalties.
The SEC had alleged that Gregg Smith, while working at the Bank of America Corp. (BAC) unit, tipped his father between December 2001 and December 2002 about material nonpublic information about Aspen Technology Inc. (AZPN); Regeneration Technologies Inc., now known as RTI Biologics Inc. (RTIX); and Triangle Pharmaceuticals Inc. while coordinating PIPE offerings for each company.
The elder Smith purchased shares in each company through accounts he controlled in the names of his spouse or one or more of three entities he controlled based on that information, the SEC said.
As a result, Elliot Smith gained more than $204,476 in ill-gotten gains, the SEC said.
Elliot Smith, with his son's assistance, also allegedly created fraudulent documents that the elder Smith provided to the SEC's staff in order to mislead them as to the reason for his trades in two of the companies, the SEC said.
-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com
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(END) Dow Jones Newswires
December 02, 2008 17:07 ET (22:07 GMT)
Publié le 02 Décembre 2008 Copyright © 2008 Dowjones
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