Politics & Government

Third Defendant Enters Guilty Plea for Insider Trading

The multi-million dollar securities fraud case already saw a Roswell man indicted and pleading guilty in late 2012.

A third person entered a guilty plea on Thursday to participating in a multi-million dollar insider trading conspriacy involving Carter's Inc. stock. A Roswell man had entered a guilty plea for his involvement in December 2012.

Mark Megalli, 41, of New York, NY, pleaded guilty on Thursday in U.S. District Court.

A news release from U.S. Attorney Sally Quillian Yates said Megalli was employed as the portfolio manager for the consumer sector at Level Global Investors, LP (“Level Global”), a multi-billion dollar hedge fund headquartered in New York, NY, between August 2009 and its dissolution in February 2011.

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In September 2009, Megalli caused Level Global to hire Eric M. Martin as a paid consultant to advise Megalli on consumer sector stocks.  Until March 2009, Martin had been employed as the vice president of Investor Relations for Atlanta-based Carter’s, Inc., the major children’s clothing company.

Beginning in mid-September 2009 and continuing through July 2010, Martin provided Megalli with inside information about Carter’s quarterly and annual financial results and other events in advance of the public announcement of the information.

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As part of his guilty plea, Megalli agreed that he is responsible for illegal insider trading gains and losses avoided for Level Global between $2.5 million and $7 million.

Martin obtained the inside information from a Carter’s executive, Richard T. Posey of Duluth, who was employed as the company’s vice president of Operations at that time.

Martin, 43, of Roswell, entered a guilty plea in December 2012 for conspiracy, securities fraud, and wire fraud in connection with his participation in an insider trading conspiracy and for his own insider trading in Carter’s stock between 2005 and 2009, while Martin was still employed as Carter’s head of investor relations. 

Sentencing for Megalli, Martin, and Posey has not yet been scheduled.


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