A consultant at A.T. Kearney on Thursday pleaded guilty to trading on confidential information about private-equity firm Carlyle Group's planned acquisition of vitamin company NBTY, Inc.
The consultant, Sherif Mityas, had learned of the acquisition while advising Carlyle on the deal, the U.S. Justice Department said.
Mityas also agreed to resolve parallel civil charges from the U.S. Securities and Exchange Commission and pay $78,000 in sanctions for purchasing NBTY stock and allegedly tipping off a relative ahead of Carlyle's acquisition.
He and the relative later made a $38,000 profit, the SEC said, but did not name or charge the relative.
Carlyle Group acquired the Long Island-based maker of nutritional supplements in October 2010 for $4 billion.
A.T. Kearney said in a statement it had cooperated fully with authorities in the matter and had terminated Mityas earlier today when it found out about his guilty plea.
Our commitment to conducting business with the highest degree of integrity has been unwavering since our founding in 1926, the firm said.
A spokesman for Carlyle Group declined to comment. A lawyer for Mityas did not respond a request for comment.
According to the criminal information filed against Mityas, Carlyle had hired Mityas and others at A.T. Kearney in May 2010 to advise the firm on a planned acquisition of NBTY.
The same month, Mityas purchased 1,300 shares of the company at $34 per share.
In July, after NBTY announced that Carlyle agreed to acquire the company for $55 per share, the company's shares shot up from $37.47 to $53 per share.
The next day Mityas sold the stock and earned a $25,000 profit, the government said.
Mityas was entrusted with highly confidential information, Sanjay Wadhwa, deputy chief of the SEC's market abuse unit, said in a press release announcing the charges.
Driven by greed, he violated that trust and jeopardized a successful consulting career for the chance to make a quick buck, Wadhwa said.
(Reporting By Sarah N. Lynch and Aruna Viswanatha in Washington, additional reporting by Gregory Roumeliotis in New York; Editing by Maureen Bavdek, Phil Berlowitz, Gary Hill)