Ex-FBI trainee gets 15 months for trading on girlfriend’s info
By Chris Dolmetsch
The pandemic forced millions of people to share working spaces with their partners or spouses while shut in their homes. For some, such as former FBI trainee Seth Markin, the close proximity led to temptation.
Markin, who had pleaded guilty, was sentenced to 15 months in prison by a federal judge for trading on confidential information about Merck & Co’s 2021 takeover of Pandion Therapeutics. He learned about the deal from his former girlfriend, a lawyer, while the two were sharing an apartment during the pandemic.
US District Judge Edgardo Ramos in New York rejected Markin’s claim that his girlfriend’s discussion of her difficulties working on the merger justified his trading.
A former FBI trainee has been jailed for 15 months.Credit: AP
“Nothing that she did I believe is in any way a reason for you to have done what you did,” Ramos said on Wednesday.
Markin’s case is one of a number brought by US authorities against people who traded on secret data gleaned from their partners while working from home. Less than a month ago, a Texas man pleaded guilty to securities fraud for making almost $US2 million ($3 million) from information he learned about an acquisition target of BP from listening to his wife’s conversations with colleagues.
Markin and a friend he tipped, Brandon Wong, were charged in July 2022 as part of a flurry of insider-trading cases announced by Manhattan US Attorney Damian Williams, who has vowed to crack down on white-collar crime. Wong pleaded guilty in April and was sentenced to five months in prison in January. Markin admitted to a single count of securities fraud in December. His ex-girlfriend was not charged.
Markin told the court during his plea hearing that he was working from his girlfriend’s apartment in early 2021 when she began working on the Pandion deal as an associate of the law firm Covington & Burling. At one point, he said, she received documents from the firm and asked for help putting them on shelves when he noticed that one of the binders was open, revealing details about the pending merger.
He said he then learned through his own research that the company had recently completed a successful trial of a drug to treat lupus. Over the next month, he said, he engaged in “otherwise innocuous” conversations with his girlfriend that led him to believe the merger had been cleared.
“Once you started you could have stopped at any time,” Ramos said. “You could not have called others. You could not have encouraged others to go all in as you did.”
Prosecutors said the two men made a total of more than $US1.4 million, most of which consisted of profits from trading by Wong, who made more than $US1.3 million and bought Markin a Rolex watch valued at approximately $US40,000, a trip to Hawaii, and a meal at a three-Michelin-starred restaurant in New York.
Markin had asked for the same sentence as Wong, saying he got details of the deal as the result of chance and hadn’t actively sought most of the confidential information that he obtained.
“Seth was motivated by factors other than greed,” his lawyers had said.
Markin, his voice cracking, told the judge on Wednesday that he found himself “lonely, isolated and weak” during the early days of the pandemic and said he was “embarrassed, degraded and remorseful” for his conduct, vowing “to use this experience to live my life in an honorable fashion”.
Prosecutors had sought a sentence of 30 to 37 months in prison, in line with federal guidelines, saying that a term of imprisonment was needed to stop people from attempting to trade based on confidential information. He had faced as much as 20 years if convicted at a trial.
Merck agreed to buy Pandion in February 2021 for $US1.85 billion, or about $US60 a share, more than double its closing price at the time.
Bloomberg
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