A former partner at accounting firm Ernst & Young LLP was guilty of securities fraud for an insider trading scheme but not guilty of conspiracy charges, a U.S. jury ruled on Friday.
James Gansman, who worked at E&Y in New York until October 2007, was indicted in May 2008 on charges of tipping off a friend about pending deals in 2006 and 2007 involving several publicly traded companies, the firm's clients.
The Manhattan federal court jury, which began deliberations on Thursday in the month-long trial, ruled that Gansman was guilty of six counts of securities fraud and not guilty on four counts of conspiracy, according to a court document.
A spokesman for the accounting firm declined comment on the verdict.
In a separate case on May 7, a jury in the same court found four current and former E&Y partners guilty of criminal tax fraud involving tax shelters to help wealthy people evade income taxes.
Gansman, who has been released on bail, faces up to 20 years in prison and millions of dollars in fines. U.S. District Judge Miriam Goldman Cederbaum scheduled Gansman's sentencing for October 1.
Gansman's friend and former co-defendant, Donna Murdoch of Malvern, Pennsylvania, pleaded guilty on December 23 last year to securities fraud. Murdoch is free on bond until her sentencing, scheduled for June 4.
The indictment said Gansman regularly leaked inside information to Murdoch about pending deals involving E&Y clients that had not yet been made public.
It said Murdoch used the tips to generate more than $390,000 in trading profits. One of the tips was about the $17.6 billion buyout of Freescale Semiconductor led by the Blackstone Group private equity firm, according to court documents.
The case is USA v Gansman et al 08-471 in U.S. District Court for the Southern District of New York (Manhattan)
(Reporting by Grant McCool, editing by Matthew Lewis)