(Bloomberg) -- A former Nuveen LLC trader admitted to tipping off an Oregon retiree about the asset management firm’s plans as part of an insider-trading scheme that netted them more than $47 million in illegal profits.
Lawrence Billimek entered a plea to one count of securities fraud Tuesday before US District Judge Paul G. Gardephe in Manhattan as part of an agreement with prosecutors. His sentencing was set for April 4. Billimek faces a maximum of 20 years in prison, though he’s likely to receive far less under his deal with the government. He agreed not to contest any sentence of 87 months or less.
Billimek, of Hailey, Idaho, admitted tipping off Alan Williams about upcoming Nuveen trades in companies including Lululemon Athletica Inc. and Ulta Beauty Inc., using prepaid burner phones. Williams, who pleaded guilty in September, would acquire shares ahead of Nuveen, then sell after the firm’s large purchases drove prices up. He sent Billimek at least $10 million of the profits via checks and wire transfers.
The case stands out for the amount Billimek, 52, and Williams, 78, made and the scale of their activity. Many recent high-profile insider trading cases, including that of former Goldman Sachs Group Inc. banker Brijesh Goel, have revolved around six-figure profits made trading ahead of a handful of transactions. Prosecutors said Billimek and Williams made more than 1,000 illegal trades between 2016 and 2022.
“I knew what I was doing was wrong,” Billimek told the judge. “I take responsibility for my actions and beg the court for mercy.”
‘Paycheck to Paycheck’
Billimek also agreed to forfeit $12.24 million, including more than $4 million in cash and properties in New Orleans, Austin, San Antonio, Hawaii, Oregon and Idaho.
A spokesperson for Nuveen said Billimek, who had worked for the firm since 2012, was terminated in December 2022, shortly after he and Williams were charged.
Williams agreed to cooperate with prosecutors as part of his guilty plea to four counts. He faces as much as 75 years in prison, but the government said it would seek a reduced punishment for him.
Before embarking on the scheme, Billimek was experiencing “substantial financial difficulties,” prosecutors said. They cited a 2016 email in which the trader wrote that he was “struggling” financially and “living paycheck to paycheck.”
New SEC Database
It’s not clear from court filings how Billimek and Williams knew each other. Prosecutors said Williams worked in the financial industry before he retired and was once head equity trader at a large investment firm.
Both men were also sued by the Securities and Exchange Commission, which has said the case made use of the Consolidated Audit Trail, a new database designed to track billions of daily equities and options trades to help identify the causes of market turmoil and catch manipulators. The regulator said staff used CAT to analyze Williams’s trades and how he profited by front-running those by Nuveen.
Launched in 2012 partially in response to the infamous flash crash two years earlier, CAT’s implementation was delayed by the pandemic as well as squabbles among exchanges, banks and brokerages over security, infrastructure, funding and other issues.
The SEC in September finally approved a funding model for the system that sticks brokers with most of the bill, but Citadel Securities and a trade group sued the agency over the changes in October.
The case is US v Billimek, 22-cr-675, US District Court, Southern District of New York (Manhattan).
(Updates with defendant’s statement, sentencing date and other detail from hearing.)
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