Donald Johnson, retired managing director of Nasdaq OMX, pleaded guilty Thursday in U.S. District Court in Alexandria, Va., to criminal charges of insider trading, the U.S. Justice Department announced in a news release.
The SEC separately announced on Thursday it was filing a civil complaint in U.S. District Court in New York against Mr. Johnson alleging insider trading. The SEC is seeking injunctive relief, “disgorgement of illicit profits” and penalties.
In the criminal case, Mr. Johnson is facing up to 20 years in prison and a $5 million fine, with sentencing scheduled for Aug. 12.
The SEC and DOJ actions were coordinated through the Financial Fraud Enforcement Task Force, which is headed by Attorney General Eric H. Holder Jr.
“Mr. Johnson was a fox in a henhouse,” Lanny A. Breuer, assistant attorney general, said in a Justice Department news release.
The Justice Department claimed Mr. Johnson made more than $600,000 using his wife’s brokerage account with his work computer to make trades with insider information.
According to an SEC news release on its civil complaint, Mr. Johnson made more than $755,000 by trading in advance of nine announcements from listed companies from August 2006 to July 2009. Mr. Johnson “brazenly stole non-public information from Nasdaq and its listed companies,” Antonia Chion, associate director of the SEC’s division of enforcement, said in the SEC release.
Mr. Johnson’s attorney, Jonathan Simms of Simms & Harris, did not respond to a phone call by press time.
Mr. Johnson was a managing director on Nasdaq’s market intelligence desk in New York from 2006 to 2009. He retired in September 2009.
