Samuel W Childs, Former Regional(NYC) compliance officer for Assent LLC (Day Trading) Pleads Guilty

updated 5:33 p.m. ET, Thurs., April. 10, 2008

NEW YORK - A former employee of Assent LLC has pleaded guilty to conspiracy in an insider-trading case involving analyst reports by UBS AG.

Samuel W. Childs Jr., who worked in the broker dealer's New York office, entered his plea Wednesday at a hearing before U.S. District Judge Loretta A. Preska in Manhattan.

"I agreed to accept money to not report suspicious trading activity to upper level management at Assent," Childs said.

Under a plea agreement with the government, the stipulated sentencing guidelines range is 18 months to 24 months. Sentencing is set for July 10.

He also will forfeit $30,000 (euro18,897) under the plea agreement.

Childs, 35, is the 13th person to plead guilty to criminal charges in two separate schemes to allegedly use inside information to make improper trades ahead of public announcements of stock recommendations by UBS analysts and ahead of news of pending mergers and acquisitions in which Morgan Stanley was acting as an adviser.

Prosecutors had alleged that Childs and Laurence McKeever, another Assent employee, each received about $30,000 (euro18,897) in kickbacks for concealing trades made by customers based on the UBS inside information from higher-level management at Assent. McKeever pleaded guilty to conspiracy in January.

Childs was originally charged last March with conspiracy, two counts of wire fraud and two counts of commercial bribery.

from the north county gazette:

NEW YORK—A general securities principal and regional administrator at a brokerage firm called Assent LLC has pleaded guilty to a conspiracy charge stemming from a scheme in which he agreed to conceal the insider trading activity of two individuals in exchange for payments of $100,000. Samuel Childs, 35 entered the guilty plea in Manhattan federal court before U.S. District Judge Loretta A. Preska.

Prosecutors said in August 2006, Childs determined that two individuals were executing an insider trading scheme through an Assent account and were reaping large, illegal profits from that trading. In particular, these individuals were executing securities transactions based on material, nonpublic information regarding upcoming upgrades and downgrades in stock recommendations by analysts at UBS Securities LLC.

Childs, in violation of his duty to Assent, agreed to conceal the insider trading scheme from higher level Assent management in exchange for payments totaling $100,000 to him and $50,000 to co-defendant Laurence McKeever. Between August 2006 and November 2006, Childs received $30,000 pursuant to the agreement.

McKeever pleaded guilty to a conspiracy charge on Jan. 23 and is scheduled to be sentenced on May 1. Childs pleaded guilty to one count of conspiracy to commit securities fraud, wire fraud, and commercial bribery. His sentencing is scheduled for July 10. He faces a maximum sentence of five years’ imprisonment.

Childs is the last of 13 defendants, against whom criminal charges were announced last year in connection with this investigation, to enter a guilty plea. 4-10-08

From Reuters:

NEW YORK (Reuters) - A broker in what U.S. officials called one of the most pervasive insider-trading rings in the last 20 years pleaded guilty to participating in the scheme.

Samuel Childs, 35, became the last of 13 defendants to plead guilty in the case that involved former employees of firms such as UBS AG, Bank of America Corp, Morgan Stanley and Bear Stearns Co Inc.

"I agreed to accept money to not report suspicious trading activity to upper management at Assent," Childs told U.S. District Judge Loretta Preska, referring to the securities broker-dealer based in lower Manhattan where he worked.

As his parents looked on, the judge asked Childs if he was pleading guilty because he was, in fact, guilty. He replied: "100 percent."

According to the original indictment, Childs agreed to keep mum about the illegal scheme in exchange for about $100,000, prosecutors said. But he had only received $30,000 at the time of his arrest.

Under the plea deal, Childs is likely to face between 18 months and 24 months in prison and forfeit $30,000 in return for admitting to one count of conspiracy to commit securities fraud, wire fraud and commercial bribery.

The case was announced by the U.S. Attorney's office in Manhattan and the FBI in March 2007. Among the defendants was a former institutional client manager, Mitchel Guttenberg, at UBS and a former in-house attorney at Morgan Stanley.

The information about upcoming UBS analysts' upgrades and downgrades was used to execute hundreds of transactions, netting more than $17.5 million, Assistant U.S. Attorney Andrew Fish said.

Guttenberg pleaded guilty to two counts of conspiracy and four counts of securities fraud and faces 78 months to 97 months in prison under sentencing guidelines. His sentencing is set for June 2.

previous posts on this case:

how david glass wore a wire and ratted everyone out, ny magazine:
NY magazine