Ex-Harman International exec arrested in U.S. for insider trading
(Adds company statement regarding Hamilton's employment status)
By Nate Raymond
Feb 5 (Reuters) - A former executive at Harman International Industries Inc was arrested on Friday and accused by U.S. prosecutors of trading on inside information about a stronger-than-expected quarterly report.
Dennis Hamilton, a former vice president of tax at Harman, was charged in a criminal complaint filed in New Haven, Connecticut, with securities fraud in connection with trades in the company's stock that prosecutors said netted him over $130,000.
The U.S. Securities and Exchange Commission brought a related civil action over the non-public information that the agency said he learned at his job, which supplies car infotainment systems.
"We allege that Hamilton traded on details known only to company insiders and took advantage of the stock market's fair and level playing field," said Sharon Binger, director of the SEC's office in Philadelphia.
Hamilton, 45, was released on a $2 million bond into home confinement with electronic monitoring after an appearance in court. His court-appointed lawyer declined comment.
Paula Davis, a Harman spokeswoman, said Hamilton was no longer employed at the company.
According to the criminal complaint, on Oct. 18, 2013, Hamilton received an email attaching a draft of Harman's quarterly report, and subsequently on Oct. 24 received an email with a draft earnings press release for the first fiscal year quarter of 2014.
Prosecutors said he also participated with other executives on an Oct. 28, 2013, conference call with its audit committee, during which a draft resolution declaring a quarterly cash dividend was discussed.
The day before Harman released its earnings, Hamilton bought 17,000 of shares of Harman, prosecutors said.
Authorities said the subsequent positive earnings announcement sent Harman's stock price up more than 12 percent, enabling Hamilton to earn $131,958 in illegal profits.
The case is U.S. v. Hamilton, U.S. District Court, District of Connecticut, No. 16-mj-00021.
(Reporting by Nate Raymond in New York)
