LI broker risks it all for just $8,824
A 39-year-old Long Island investment adviser is in hot water and could lose his liceą¼nse aź¦fter allegedly trading on an insider tip on a $3.6 billion pharmaceutical deal ā info that netted him a whopping $8,824.
The adviser, Tibor Klein, got the tip from hšis drunk lawyer pal Robeš¤Ŗrt M. Schulman who, after a few too many cocktails, blurted out during an August 2010 dinner, āIt would be nice to be King for a day,ā according to a complaint filed Friday by regulators.
The lawyerās firm worked for King Pharmš²aceuticals, which two months later agreed to be bought by Pfizer for $3.6 billion.
āSchulman intended to imply he was a ābig shotā who knew āsomeā kind of informationā about King Pharmaceuticals,ā the Securities and Exchange Commission said in its complaint.
On Aug. 16, the first day the market opened after his dinner meeting with Schulman, Klein bought 8ā 00 shares of King for himself and 59,800 for his clients,š including 3,000 shares for Schulman, according to the SEC.
The broker continued to buy more King stock through Sept. 15, it is alleged. Those were his āmost significantā purchases of a single stock that year, court paperā s mainā¤tain.
The Melville,āØ N.Y., broker also passed the tip to his best friend and high school buddy, Michael Shechtman, of Lake WorthāØ, Fla., who bought 2,500 shares of King for himself and another 2,400 for his wifeās retirement account ā plus 300 call options, the SEC claims.
It was the first time Shechtman hadš® ever bought āoptions, the SEC said.
Pfizer and King had entered intšo a confidentiality agreement to discuss Pfizerās possible acqušisition of King on July 9 of that year, according to the complaint.
The deal was announšced in October 2010 and King shares shot up 39 percent.
Overall, more than $400,000 in illegašl gains weršÆe made from the tip.
Klein pocketed just $8,824, the SEC said ā while 46 clients of his Klein Financial Services brokerage firm made $319,550, or about $7,000 ašpiece.
Shechtman, also 39, netted illegal gains of $109,049 fąµ©or him and his wife, according to the SEC.
Schulman, who was not charged, was one of Kleinās clients whoź¦æ profited from the insider trading. He made $15,500 through a managed account.
When asked Frišday by šThe Post if he was cooperating with the SEC, Schulman ā who has also taught patent law at Georgetown University, according to his firmās web site ā declined to comment.
Shechtman liquidated tš§øhe options account that day and sold the stock on Oct. 15.
He left his employer Ameriprise in 2012.
Shechtman and Kleišŗn admitted talkiā¤ng to each other about the trades, the SEC complaint said. Neither could be reached for comment.