In a nutshell: The FBI arrested two individuals for securities fraud and conspiracy. The indictment, unsealed on Thursday, charges former Goldman Sachs analyst Anthony Viggiano and long-time friend Stephen Forlano with insider trading. A third friend and co-conspirator, Christopher Salamone, pleaded guilty to the scheme and is cooperating with prosecutors.
The indictment alleges that Viggiano, Forlano, and Salamone engaged in a scheme between October 2021 and May 2023 to profit in the stock market by strategically investing in companies involved with unnamed firms that employed Viggiano. He allegedly shared "material non-public information" (MNPI), such as unannounced acquisitions and partnerships. Forlano also passed that information on to at least five of his friends and family.
To conceal the exchange of MNPI, the conspirators communicated via Xbox 360 chat and the Signal app with "disappearing messages" enabled. Bloomberg notes that after the FBI questioned Viggiano and Salamone in June, the latter became concerned that law enforcement would find their communications. Viggiano told him not to worry.
"Nah. Nah," Viggiano reassured him. "Because similar to you... Signal, or like XBOX 360 chat, there's no tracing that. Good luck ever finding that."
Ironically, Viggiano and his team from the University of Tampa won a 2018 ethics competition.
US v. Viggiano and Forlano Indictment via Scribd
Little did Viggiano know that Salamone recorded the conversation. It is unclear whether Salamone was preparing to snitch or made the recording as an insurance policy to take Viggiano down with him if it came to that.
"This indictment is yet another example of individuals believing they can get away with benefiting from trading on material non-public information," said FBI Assistant Director in Charge James Smith. "As we have shown before, this type of alleged corporate self-dealing will not be tolerated. The FBI will ensure that those responsible for insider trading face the consequences in the criminal justice system."
In total, Viggiano passed along insider information on at least seven separate deals involving publicly traded companies. Salamone allegedly made $322,000 on illegal investments. Despite his friend suggesting they split the profits on the illicit trades evenly, Salamone initially gave Viggiano only $35,000 but planned to hand over more. Forlano raked in over $100,000 for his part in the scheme.
Prosecutors charged Viggiano with eight counts of securities fraud, each carrying up to 20 years in prison, and one count of conspiracy, which could tack on an additional five. He could be sentenced consecutively for up to 165 years.
Forlano and Salamone each face three counts of securities fraud and one count of conspiracy. However, Salamone was the first to cop a plea deal agreeing to cooperate with the government, so will likely receive leniency from the court as part of that agreement.
Image credit: Shaun Greiner
https://www.techspot.com/news/100351-fbi-indicts-three-insider-trading-scheme-utilized-xbox.html
