Ruston Resident Indicted For Insider Trading In Connection With The Acquisition Of The Shaw Group
BATON ROUGE – United States Attorney Walt Green announced today that another individual has been charged with insider trading in connection with the acquisition of the Shaw Group.
A federal grand jury sitting in the Middle District of Louisiana has indicted Dr. Jesse H. Roberts, III, 43, of Ruston, LA, with conspiracy to commit securities fraud (insider trading), in violation of Title 18, United States Code, Section 371, and securities fraud (insider trading), in violation of Title 15, United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-1.
An indictment is an accusation by the Grand Jury. A defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea. If convicted, Roberts faces significant incarceration, fines, restitution, and supervised release following imprisonment.
The Indictment alleges that from on or before July 2012, and continuing to at least November 2013, Roberts and his brother-in-law, Scott Zeringue, a former executive with The Shaw Group, engaged in a scheme to profit from inside information about the upcoming merger between Shaw and Chicago Bridge and Iron Company.
According to the allegations contained in the Indictment, in mid-2012, Shaw was considering a potential merger opportunity. At the time, Zeringue was the Vice President of Construction Operations for Shaw’s Plant Services Division. In late July 2012, Shaw and CB&I came to an agreement whereby CB&I acquired all outstanding shares of Shaw stock. The merger between the two companies was publicly announced on July 30, 2012. As a result of the public announcement, Shaw’s stock price rose substantially.
The indictment alleges prior to the public announcement and through his job at Shaw, Zeringue obtained inside information about the upcoming merger between Shaw and CB&I and passed the inside information to Roberts. Thereafter, Roberts and Zeringue allegedly purchased Shaw securities before the public announcement and sold their Shaw securities after the public announcement had caused Shaw’s stock price to rise, all at the expense of Shaw shareholders and potential Shaw shareholders who were not privy to the inside information. The Indictment also alleges that Roberts made more than $650,000 in proceeds from his illegal insider trading activities.
Prior to the Indictment announced today, Zeringue was charged in the Middle District of Louisiana with conspiracy to commit securities fraud. On June 27, 2014, Zeringue pled guilty as charged pursuant to a plea agreement with the United States.
Other federal prosecutions have resulted from insider trading related to the acquisition of the Shaw Group. In separate proceedings being handled by the U.S. Attorney’s Office for the Western District of North Carolina, a former Wells Fargo investment banker and seven of his conspirators have been convicted on insider trading charges related, in part, to the Shaw sale, with sentences up to 10 years in prison.
In announcing today’s Indictment, U.S. Attorney Walt Green praised the investigative work of the U.S. Secret Service, the Federal Bureau of Investigation, and the Internal Revenue Service-Criminal Investigation, and thanked the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the U.S. Attorney’s Offices for the Western District of North Carolina and the Western District of Louisiana for their assistance.
This matter is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana and the Baton Rouge offices of the FBI, Secret Service, and IRS-Criminal Investigation. It is being prosecuted by Assistant United States Attorney Chris Dippel and Senior Litigation Counsel Patricia Jones.