Ex-executive of Harman International Industries admits inside trade

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A former executive of an audio-visual equipment company called Harman International Industries pleaded guilty to insider trading after purchasing shares in advance of the company's quarterly financial results and cashing in on a jump in the stock price.

Reuters reported that Dennis Hamilton pleaded guilty to one count of securities fraud related to an insider trading case which amounts to $130,000 from 2013. Hamilton, 45, who was also the former vice president of Harman International, faces up to 20 years in jail time. According to his plea agreement, he could get one to two years under recommended federal guidelines.

Hamilton of Norwalk also agreed not to challenge the penalty of $131,958. The fine represents his illegal earnings. Brian Spears, the defense attorney of Hamilton, made no comment about the case nor the penalty that was placed.

US Attorney for the District of Connecticut Deirdre Daly said Hamilton bought 17,000 shares of Harman International back in 2013. The purchase happened after he received advance materials on a conference call before the company released its first-quarter earnings for the fiscal year 2014, reports Stamford Advocate.

Harman International Industries, based in Stamford, allowed its directors to buy or sell securities of the company in the public market during a declared window, says News Day. Hamilton received a nonpublic information about the financial results of Harman and then bought shares - which happened outside the declared window. Shares of Harmon rose 12.5 percent after the company made its results public.

The Federal Bureau of Investigation headed the investigation and the case is being prosecuted by Assistant US Attorney Heather Cherry. The prosecutor claimed that Hamilton profited on 17,000 Harman shares, which he brought through a Charles Schwab account.

Hamilton was arrested last month and is scheduled to be sentenced on June this year by US District Judge Alvin W. Thompson. He is free on bond , but reports say that his fine could reach up to $5 million.

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