A former cannabis executive used insider information obtained from his employment to purchase shares of a rival cannabis company that was privately the target of an acquisition, according to an indictment returned in federal court in Chicago.
The indictment accuses Anthony Marisco of obtaining material, non-public information about his company’s agreement to purchase the rival company, according to a press release sent by the U.S. Attorney’s Office for the North District of Illinois.
Prior to the public announcement of the agreement, and while the two companies were privately negotiating the proposed acquisition, Marsico allegedly used the information to purchase more than 900,000 shares in the rival company’s stock, resulting in illegal profits of approximately $607,338, the indictment states. Marsico later sold all of the stock before it was publicly announced that the potential acquisition was canceled, the indictment states.
“While the proposed acquisition was still pending, Marsico tipped off a friend, ARTHUR PIZZELLO, about the potential acquisition”, states the release. “The information allowed Pizzello to also buy shares in the rival company, the indictment states. Pizzello, in turn, passed on Marsico’s information to two others, ROBERT QUATTROCCHI and TIMOTHY CAREY, allowing them to purchase the rival company’s stock as well, the indictment alleges. The four defendants were social friends and played golf together at a private country club, the indictment states.”
The indictment was returned Thursday in U.S. District Court in Chicago. It charges Marsico, 39, of Bartlett, Ill., Pizzello, 61, of Wayne, Ill., Quattrocchi, 63, of Schaumburg, Ill., and Carey, 57, of Hanover Park, Ill., with conspiracy to commit securities fraud. Marsico is also charged with six individual counts of securities fraud. Arraignments in federal court in Chicago have not yet been scheduled.
The indictment was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI. The U.S. Securities and Exchange Commission, which filed a civil enforcement action against the four defendants, provided valuable assistance. Assistant U.S. Attorneys Bradley Tucker and Jared Hasten represent the government.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
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