Former Computer Horizons CEO Convicted of Insider Trading
Friday October 3, 2:39 pm ET
By Nick Baker
NEW YORK -- A jury Thursday convicted the former chief executive of Computer Horizons Corp. (NasdaqNM:CHRZ - News) for buying shares of Data Processing Resources Corp. (NasdaqNM:CPWR - News) based on nonpublic information, garnering him more than $150,000 in illegal profits.
John J. Cassese, who left Computer Horizons in March, was found guilty of buying 15,000 Data Processing shares on June 22, 1999 -- the day before that company's board approved an acquisition by Compuware Corp. .
The government argued that Mr. Cassese learned of the merger when Compuware's CEO called to tell him that Data Processing -- not Computer Horizon -- would be acquired. Cassese bought the Data Processing shares the next day for $13.25 each. Compuware's $24-a-share offer to acquire Data Processing was announced two days later, causing the stock to jump. Mr. Cassese sold the shares that day at a $150,937 profit.
He paid more than $300,000 last year to settle the Securities and Exchange Commission's (News - Websites) investigation.
Mr. Cassese, 58 years old, could spend up to 10 years in prison and faces a penalty of up to $1 million. The conviction followed a one-week trial before U.S. District Judge Robert W. Sweet in Manhattan.
Mr. Cassese's lawyer, David Brodsky, a former lawyer at Credit Suisse First Boston, is in the middle of testifying in the criminal obstruction of justice trial of Frank Quattrone, who used to be an investment banker at Credit Suisse Group's (NYSE:CSR - News) CSFB unit.
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