But on June 1, 2009, the first business day after the associate mentioned IBM's pending acquisition of SPSS, the civil complaint claims that the individual identified as the source (also known as CC-3 by federal prosecutors) began the process of purchasing stock in the target company as a direct result of the information disclosed by his close friend.
On July 23, 2009, the source informed the associate that he had traded on the inside information, according to the civil complaint. The SEC and Justice Department claim that the associate expressed outrage and demanded that the source sell off all of his SPSS holdings. The source did so, but still held 500 shares of SPSS common stock at the time IBM officially announced its intention to acquire the Chicago-based company on July 28, resulting in $7,600 in profits, according to the SEC.
Meanwhile, the source had fed what he learned from the lawyer about IBM's potential SPSS acquisition to his roommate, Conradt, according to the government. Conradt, in turn, told Weishaus, and the two subsequently traded in SPSS securities ahead of the company's announced sale to IBM on July 28, according to the criminal and civil complaints, which include snippets of instant messages between the two exhorting one another to "keep this in the family" because they didn't "want to go to jail."
Conradt and Weishaus made only $2,538 and $129,290, respectively, after selling their SPSS holdings, according to the SEC, although three other unindicted coconspirators cited by the Justice Department allegedly reaped sums of $629,954, $254,360, and $7,900 as a result of their own inside trades. (The latter figure represents the nearly $8,000 made by the source, or CC-3, through his inside trades.)
The Justice Department and SEC filings offer few additional details about the associate, who is not accused of any wrongdoing, except that he is a citizen of New Zealand and transferred into the M&A group at the law firm advising IBM on the SSPS deal sometime in December 2008.
A comparison of the five Cravath associates and one summer associate identified in The Am Law Daily's July 28, 2009, story as working on the deal against those listed in a Cravath press release issued the same day and available on the firm's website reveals several discrepancies. Specifically, the Cravath press release includes two names not included in the original report and omits one.
That missing associate, Mike Dallas, is identified on his LinkedIn profile as having strong ties to New Zealand. Dallas obtained a law degree in 2004 from the Victoria University of Wellington in New Zealand. From there, he went to work at Chapman Tripp, one of New Zealand's largest law firms, before joining Cravath in September 2008—about eight months prior to the May 2009 get-together that the government says details about IBM's SPSS deal were shared.
Dallas's LinkedIn page says he left Cravath in December 2010, roughly the same time that the criminal complaint states that Attorney-1 and CC-3 became aware that the SEC was investigating insider trading related to the deal.
"Shortly thereafter, in November 2010, the Source confessed to the Associate that he had tipped the inside information to Conradt," states the SEC in its complaint. "Approximately one week later, the Associate visited the Source at the Source's apartment and observed the Source packing up his belongings. The Source informed the Associate that he was leaving the [U.S.] and returning to Australia because, in light of the [SEC]'s investigation, it was his 'best option.'"
According to Dallas's LinkedIn page, he is now an in-house legal adviser at Spire Healthcare, the second-largest private hospital group in the U.K. An email sent to Dallas at Spire Healthcare received an out-of-office reply stating that he was out on "annual leave."
