BOSTON (Reuters) - A former senior managing director of a firm that advises companies on shareholder votes was convicted on Tuesday of participating in a scheme to bribe a proxy adviser’s employee with sports and concert tickets to learn how its investor clients were voting.
A federal jury in Boston found Donna Ackerly, who worked at proxy solicitation firm Georgeson LLC, guilty of conspiracy and wire fraud charges related to her role in a scheme to bribe an Institutional Shareholder Services employee in exchange for confidential voting information.
She was among five ex-employees of Computershare Ltd’s Georgeson unit to face charges in a case that prosecutors say shows how a black market for secret corporate information exists for purposes other than insider trading.
An earlier trial of Ackerly and three other ex-Georgeson employees ended in a mistrial in March. U.S. District Judge Richard Stearns in August barred a retrial of the other three. Prosecutors are appealing that decision.
Ackerly, 61, is scheduled to be sentenced in April.
Michael Kendall, Ackerly’s lawyer, said she would appeal. In his closing argument on Monday, he argued prosecutors lacked evidence showing she knowingly participated in a bribery scheme.
Proxy solicitation firms like Georgeson help publicly traded companies on matters that require shareholder approval by trying to gather information about institutional investors’ holdings and how they are voting.
Such information can help proxy solicitors give companies insight into whether shareholder proposals will likely pass or fail and shape strategies to affect the outcome.
Prosecutors said that from 2007 to 2012, Georgeson employees sought an illegal edge by bribing ISS employee Brian Bennett with $14,000 worth of tickets to events like a Boston Red Sox baseball game and concerts featuring U2 and Jay-Z.
Bennett in exchange told Georgeson employee Michael Sedlak secret details about how ISS’s clients were voting, which Sedlak relayed to Ackerly and three other Georgeson employees, Charles Garske, Richard Gottcent and Keith Haynes, prosecutors said.
That information concerned votes on matters involving companies including Walt Disney Co and Archer Daniels Midland, prosecutors said.
They said Ackerly and Garske also arranged to have the bribes billed to clients using invoices that included false descriptions, such as “courier services.”
Bennett and Haynes have pleaded guilty. Prosecutors are appealing Stearns’s decision to dismiss charges against Sedlak, Garske and Gottcent after the first trial.
Georgeson agreed to pay $4.5 million in 2017 and enter into a deferred prosecution agreement to resolve related charges.
Reporting by Nate Raymond in Boston; Editing by David Gregorio