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Ex-Merck analyst facing insider trading charges to plead guilty -lawyer

Reuters - UK Focus

By Nate Raymond

NEW YORK, Feb 9 (Reuters) - A former Merck (Swiss: MRK.SW - news) & Co Inc finance analyst plans to plead guilty to engaging in an insider trading scheme by tipping a former Bank of New York Mellon Corp employee about potential pharmaceutical mergers, his lawyer said on Monday.

Zachary Zwerko is in the process of negotiating a plea agreement to resolve the conspiracy and securities charges he faces, his lawyer, Jeffrey Denner, confirmed after a court hearing in Manhattan federal court.

U.S. District Judge Alvin Hellerstein scheduled a Feb. 19 plea hearing while prosecutors and Zwerko work out a deal.

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"We will present our case at sentencing, and this case will be put in better context," Denner said.

Zwerko was one of 92 people charged by the office of Manhattan U.S. Attorney Preet Bharara since 2009 as part of a crackdown on insider trading.

Prosecutors said that from 2012 to 2014, Zwerko passed illegal tips about three stocks to David Post, a Rutgers Business School classmate who had been a product manager at BNY Mellon.

Authorities said Zwerko passed along information about Merck (Other OTC: MKGAY - news) 's acquisition of Idenix Pharmaceuticals, as well as Ardea BioSciences and ViroPharma Inc, which he learned were potential acquisition targets.

AstraZeneca PLC (NYSE: AZN - news) announced a bid for Ardea in April 2012, while Shire PLC (Xetra: S7E.DE - news) announced a takeover of ViroPharma in November 2013.

Prosecutors said the trading allowed Post to earn more than $737,000, of which he gave about $57,000 to Zwerko.

Post pleaded guilty in October to conspiracy and securities fraud charges as part of a cooperation deal with prosecutors.

Zwerko, who was first charged in October, had faced one count of conspiracy to commit securities fraud and three counts of securities fraud. He also faces related civil charges by the U.S. Securities and Exchange Commission.

The case is U.S. v. Zwerko, U.S. District Court, Southern District of New York, No. 00715. (Reporting by Nate Raymond in New York; Editing by Alan Crosby)