NEW YORK, Oct 25 (Reuters) - A former investment adviser at an Oppenheimer Holdings Inc unit plans to plead guilty on Tuesday to charges that he traded on inside information supplied by a childhood friend working at Pfizer Inc, according to his lawyer.
David Hobson, 47, will plead guilty in Manhattan federal court to conspiracy and securities fraud charges over conduct prosecutors said began while he was at Royal Bank of Canada unit RBC Capital Markets and then continued at Oppenheimer & Co Inc, Michael Bowers, his lawyer, said in an email.
Hobson, a Providence, Rhode Island, resident, would be the second individual to admit guilt in the case, after Michael Maciocio, Hobson’s friend at Pfizer, pleaded guilty in May and reached a deal to cooperate with prosecutors.
The case was announced in June amid a resurgence of insider trading cases this year in Manhattan, where prosecutors have wrestled with a 2014 appellate ruling that limited the scope of insider trading laws.
According to prosecutors, Hobson and Maciocio engaged in an insider trading scheme from 2008 to 2014 based on information obtained by Maciocio, a director of chemical research and development at Pfizer.
In that job, Maciocio sometimes evaluated Pfizer’s capacity to manufacture drugs being developed by other companies Pfizer considered potential acquisition targets or partners, authorities said.
While Maciocio was not typically given the identity of a company in a potential deal, with Hobson’s help he performed research to discern its identity, the indictment said.
After identifying the company, Maciocio then passed the information to Hobson, his stockbroker, who executed trades in accounts belonging to himself, Maciocio, and clients of Oppenheimer and RBC, prosecutors said.
Trades by Hobson in the stocks of Medivation Inc, Ardea Biosciences Inc and Furiex Pharmaceuticals Inc resulted in profits of $180,000 for himself, $40,000 for Maciocio and $150,000 for certain of Hobson’s clients, prosecutors said.
The case is U.S. v. Hobson, U.S. District Court, Southern District of New York, No. 16-cr-351. (Reporting by Nate Raymond in New York; Editing by Andrew Hay)