BOSTON – Three men were arrested today for allegedly conspiring to trade on inside information about a Massachusetts company’s planned acquisition of a California semiconductor company.
David Forte, 58, of Acton; John Younis, 59, of Bristol, R.I.; and Gregory Manning, 59, of Needham, were each charged with one count of conspiracy to commit securities fraud. The defendants will appear in federal court in Boston this afternoon.
According to the charging documents, beginning in or around June 22, 2016, Forte – an officer with the Needham Police Department – obtained material non-public information from a close relative who is a senior executive at Analog Devices, Inc. (Analog), a Norwood-based semiconductor company, about Analog’s planned acquisition of Linear Technology Corp. (Linear), a semiconductor company based in Milpitas, Calif. Forte allegedly passed the information to two close friends, Manning and Younis, who purchased shares of Linear stock in the week leading up to the public announcement of the acquisition on July 26, 2016. Younis also allegedly purchased call options -which are a bet that the price of a stock will increase prior to the expiration of the option – and tipped a business associate to purchase Linear shares as well. After the deal was announced, Manning, Younis and Younis’ associate allegedly sold their Linear securities at a profit, and Manning paid Forte a kickback in appreciation for Forte’s stock tip.
The charge of conspiracy to commit securities fraud provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Rachael S. Rollins and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Office, made the announcement. The Securities & Exchange Commission provided valuable assistance. Assistant U.S. Attorney David M. Holcomb of Rollins’ Securities, Financial & Cyber Fraud Unit is prosecuting the case.