U.S. Department of Justice

United States Attorney
Eastern District of New York

Thursday, March 15, 2012

Business Consultant Pleads Guilty in New York to Insider Trading

BROOKLYN, N.Y. – Sherif Mityas pleaded guilty today to a securities fraud charge in connection with a stock purchase he made while in possession of confidential information.  The proceedings were held before U.S. Magistrate Judge Joan M. Azrack in Brooklyn.

 

The guilty pleas were announced by Loretta E. Lynch, U.S. Attorney for the Eastern District of New York, and Janice K. Fedarcyk, Assistant Director-in-Charge, FBI New York Field Office.

 

According to the charging documents and other court filings, the defendant is a consultant who was hired to advise Carlyle Group on its multi-billion dollar acquisition of NBTY, a publicly traded company headquartered in Ronkonkoma, N.Y.  Shortly after being engaged by Carlyle, the defendant transferred a large sum of money to a stock brokerage account that he controlled and purchased more than 1,000 NBTY shares.  On the morning of July 15, 2010, Carlyle issued a press release announcing its $3.8 billion acquisition of NBTY, causing NBTY’s share price to rise substantially.  That same morning, the defendant sold his NBTY shares for a large profit.

 

“Insider trading is an insidious crime, which undermines investor confidence in the integrity of our securities markets” said U.S. Attorney Lynch.  “Mityas was entrusted with confidential information in his role as a business consultant and grossly abused that trust by secretly profiting on illegal trading activity.  As this case demonstrates, we will not tolerate people using inside information to line their own pockets and harm investors who play by the rules.”  U.S. Attorney Lynch expressed her grateful appreciation to the FBI, the agency responsible for leading the government’s investigation, and thanked the U.S. Securities and Exchange Commission for its assistance. 

 

The defendant faces a maximum sentence of 20 years in prison on the securities fraud conviction.

 

The government’s case is being prosecuted by Assistant U.S. Attorneys James G. McGovern and David C. Woll Jr.

 

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.  For more information on the task force, visit: www.StopFraud.gov.

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GENERAL INFORMATION
Financial Fraud Enforcement Task Force

 Leadership
Eric Holder, Attorney General, Chair
 
 Contact
(202) 514-2000
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What is Financial Fraud?
What is Financial Fraud?

Financial Fraud encompasses a wide range of illegal behavior - from mortgage scams to Ponzi schemes, credit card theft to tax fraud. Everyone is affected by financial fraud.