The Securities and Exchange Commission on Wednesday filed insider trading charges against a former Illumina accountant and friend whose alleged scheme resulted in $6.2 million in profits.
aMartha Patricia Bustos, a certified public accountant, illegally tipped her friend Donald Blakstad with confidential information ahead of Illumina’s quarterly performance filings in exchange for expensive gifts, according to the SEC. Blakstad then used the acquired information to purchase Illumina securities and earn roughly $4 million in profit, with another $2.2 million earned by friends that he also tipped off.
The SEC’s complaint seeks permanent injunctions, disgorgement with prejudgment interest, and penalties against the pair for violating antifraud provisions.
“We used some of our latest advanced software to analyze trading data, as well as traditional investigative techniques, to piece together and expose the betrayal of trust alleged in our complaint,” Kelly L. Gibson, associate director of the SEC’s Philadelphia Regional Office, said in a release. “We allege that Bustos had an obligation to keep her company’s information confidential until announced to our markets, yet she repeatedly tipped Blakstad and allowed him to take advantage of her position.”
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York unsealed criminal charges against Bustos and Blakstad on Wednesday.
The SDNY announced Bustos pleaded guilty to counts of conspiracy to commit securities fraud, securities fraud, and conspiracy to commit wire fraud on June 28 and is cooperating. Blakstad was arrested Wednesday in San Diego and is being charged with five counts of conspiracy, securities fraud, and wire fraud.