By Joseph Ax
NEW YORK (Reuters) - A former executive at a New York investor relations firm, whose barefoot dash from news photographers last month caught the attention of Comedy Central's The Daily Show, pleaded guilty on Wednesday to insider trading.
Michael Lucarelli, the former director of market intelligence at Lippert/Heilshorn & Associates, pleaded guilty in Manhattan federal court to one count of securities fraud on his 52nd birthday. He faces up to 20 years in prison at his sentencing in January, though he's likely to receive a shorter term.
Prosecutors said he used nonpublic information gleaned from LHA documents to trade in companies that were clients of the firm, earning nearly $1 million in illicit profit from 2013 to 2014.
In August, following his arrest and initial court appearance, Lucarelli fled photographers in a sleeveless undershirt, leaving his sandals behind in his haste. His all-out sprint was captured by CNBC and the video clip was featured on an episode of The Daily Show.
He wore a suit and dress shoes on Wednesday and did not flinch when photographers approached him outside.
Lucarelli told U.S. District Judge Jesse Furman he used drafts of press releases he obtained through LHA to buy shares in certain companies, selling his stock after the announcements were made public.
Federal agents approached LHA in July and asked the firm not to fire Lucarelli so the investigation could proceed, Keith Lippert, a founder of the firm, told Reuters last month.
Investigators found a draft press release from TREX Co Inc in Lucarelli's office, according to the initial criminal complaint. They left the document there to avoid alerting him.
During the following week, one of Lucarelli's brokerage accounts bought more than 37,000 shares of TREX, according to the complaint. The stock was sold on Aug. 4, the date the press release was made public.
Lucarelli said his behavior was influenced in part by his use of medication for a chronic disease as well as anger at LHA for what he said was a failure to pay him what he was owed.
"None of this excuses my gambling addiction to day trading," Lucarelli said, crying.
In an email, Lippert said, "Given that he conducted his criminal acts for more than a year, he had plenty of time to quit. I guess he made the wrong choice."
Along with the TREX transaction, Lucarelli admitted trading illegally in FAB Universal Corp, PhotoMedex Inc, Pacific Ethanol Inc, Dot Hill Systems Corp, Lifetime Brands Inc and LCA-Vision Inc. He also agreed to forfeit at least $955,000 to the government.
Lucarelli still faces a parallel civil lawsuit brought by the U.S. Securities and Exchange Commission.
The case is the latest in a series of insider trading cases brought by Manhattan U.S. Attorney Preet Bharara, whose office has convicted more than 80 individuals since October 2009.
(Reporting by Joseph Ax; Editing by Meredith Mazzilli and Tom Brown)