A former Nuveen equity trader was ordered to spend almost six years behind bars after admitting he tipped off another man to the firm's trades as part of a $47 million front-running scheme.
U.S. District Judge Paul Gardephe sentenced Lawrence Billimek on Monday to 70 months in federal prison, matching the minimum punishment requested by prosecutors. Billimek, 53, pleaded guilty to one count of securities fraud as part of an agreement with prosecutors.
Gardephe said Billimek, a career equities trader, was well aware that leaking sensitive information to generate millions in profits was "blatantly and flagrantly illegal."
Billimek's conduct was "the product of literally hundreds of bad decisions made over a period of six years or more," the judge said.
Half a dozen friends and family were in court to support Billimek, who didn't react to the sentence but hugged one of his supporters after the judge left the room. Billimek must report to prison in August.
The judge recommended that the Bureau of Prisons place the father-of-three in a facility in Florida.
Billimek told the judge Monday he was deeply remorseful for breaking the law and his own moral code.
"This case has been a total reset for me," the former trader said at the hearing. "I finally found the courage I need to step up and change."
Pre-Trade Tips
Billimek admitted to tipping off an Oregon retiree, Alan Williams, about Nuveen's planned trades in stocks, including Lululemon Athletica Inc. and Ulta Beauty Inc., as part of a complex six-year plot that involved more than 1,000 trades and the use of burner phones to hide their interactions from authorities.
The scheme was one of the first uncovered by the Consolidated Audit Trail, a new database of trading information launched by the Securities and Exchange Commission in the wake of the 2010 Flash Crash. It was designed to help diagnose the sources of market turmoil and uncover potential manipulation.
The plot by Billimek and Williams also was notable for the size of their alleged gains. Many of recent insider-trading cases have involved six-figure profits that revolved around just a handful of trades.
"Lawrence Billimek shamelessly abused his position, orchestrating an insider trading scheme that pocketed tens of millions in illicit gains," U.S. Attorney for the Southern District of New York Damian Williams said.
Billimek's job at Nuveen, a unit of TIAA-CREF, gave him access to confidential information because he had responsibility for routing orders based on trading decisions made by the firm's portfolio managers to broker-dealers. He'd worked at the firm since 2012.
Wire Transfers
Prosecutors said Williams, a former head trader at another large financial institution, used Billimek's tips to place orders through least two retail brokerage accounts that matched those planned by Nuveen. He'd then exit his positions once Nuveen started trading, which usually moved prices.
Williams sent Billimek his share of the profit through checks and wire transfers totaling about $12 million, and sometimes disguised the payments as gifts, the government said.
