Thursday, July 30, 2015

Feds accuse Saridakis of insider trading in eBay-GSI deal

SEC complaint settled, criminal complaint pending

Feds accuse Saridakis of insider trading in eBay-GSI deal

Former GSI Commerce president Chris Saradakis. (Photo from
Former GSI Commerce president Chris Saradakis. (Photo from

US Attorney for Philadelphia Zane David Memeger has filed a criminal accusation of securities fraud against Christopher Saridakis, 45, of Wilmington, accusing Saridakis of texting messages to a business contact suggesting the conact should buy shares of the former GSI Commerce in March 2011, before the King of Prussia online retailing management company was acquired by eBay in this $2.4 billion deal. Saridakis, a veteran of several Philadelphia-area e-commerce companies, ran the business for eBay after the sale.

Saridakis' contact, identified in a separate SEC complaint as Jules Gardner, founder of online ad developer PointRoll, bought the stock and collected "an illicit profit of $260,304" when it doubled after the eBay deal was announced. Saridakis is also accused of "sharing the same material non-public information with family members and his neighbor," some of whom are identified in the SEC complaint.

“Mr. Saridakis accepts responsibility for his conduct in his matter. He has done everything he can to make the situation right and will continue to do so. He deeply regrets the effect of his mistake on his family and friends,” his lawyer, Richard J. Zack of Pepper Hamilton, told me. Zack told me Saridakis has settled the SEC civil complaint. More on the settlement from Bloomberg here.

Saridakis could face up to 20 year in prison and a $5 million fine if the case went to trial and he were convicted. However, he was not indicted, but named in a federal "information" statement; cases brought in this way are often settled without a trial at penalties below the maximum. 

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

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