One co-conspirator from Brielle already had pleaded guilty in the case and will be sentenced in May.
NEWARK -- Two day traders, including one from Monmouth County, admitted in federal court that they joined an illegal insider trading scheme that made nearly $4 million in profits, U.S. Attorney Paul J. Fishman's office announced Tuesday.
Steven Costantin, 55, of Farmingdale and Ronald Chernin, 67, of Oak Park, Calif., pleaded guilty before U.S. District Judge Michael A. Shipp. Both of them pleaded guilty to one count of conspiracy to commit securities fraud and one count of securities fraud.
According to court documents, Costantin worked for his brother-in-law, Steven Fishoff, president of Featherwood Capital of Westlake Village, Calif.
Costantin and Chernin and others in the conspiracy falsely characterized their trading entities as full-service financial management firms so that investment banks would solicit them to participate in stock offerings, records say.
When they were solicited, Chernin, Costantin and the others were required to not reveal confidential information they learned while considering whether to purchase the securities.
Investor admits $250K profit on inside info
But Costantin, Chernin and Fishoff "directly or indirectly" tipped off each other and others with the inside information, prosecutors said.
They then took positions to profit on the news when the offering was made available to the public, the complaint says.
The conspiracy earned more than $3.9 million, it says.
A resident of Brielle and a friend of Fishoff, Paul Petrello, previously pleaded guilty for his role in conspiracy and is scheduled to be sentenced May 25, according to court records.
Fishoff was indicted last year and is awaiting a hearing date.
The conspiracy count to which Chernin and Costantin pleaded guilty carries a maximum penalty of five years in prison and a $250,000 fine, Fishman's office said. The securities fraud count carries a maximum penalty of 20 years in prison and a $5 million fine, it said.
Costantin and Chernin are scheduled for sentencing on July 7, the U.S. Attorney's office said.
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