Canadian pleads guilty to insider trading

Tue Oct 27, 2009 6:58pm EDT
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By Grant McCool and Jonathan Stempel

NEW YORK (Reuters) - A Canadian man on Tuesday pleaded guilty to U.S. and Canadian criminal charges stemming from a 14-year insider trading scheme, a day after his alleged accomplice apparently committed suicide.

Stanko Grmovsek, who U.S. prosecutors said is 40, pleaded guilty to conspiracy to commit securities fraud by insider trading, in an afternoon hearing before U.S. District Judge Naomi Reice Buchwald in Manhattan.

Earlier Tuesday, Grmovsek appeared in a Toronto court to plead guilty to Canadian criminal charges in the case, the Ontario Securities Commission said.

Regulators had accused the Woodbridge, Ontario, resident of generating nearly $10 million of illegal profits by trading on inside information on as many as 40 pending corporate merger and acquisition transactions.

"I engaged in a process of insider trading over a number of years," Grmovsek told Judge Buchwald. "I gained profits from such activity, which I split with my associate."

He faces a possible 37 to 46 months in prison under federal sentencing guidelines on the U.S. plea.

The U.S. Securities and Exchange Commission separately

filed a civil lawsuit on Tuesday, a day after Grmovsek's alleged accomplice, Bay Street lawyer Gil Cornblum, killed himself, according to a report in The Globe & Mail newspaper.   Continued...