Ex-adviser illegally shared tips

Scott Allen, a former Mercer LLC investment adviser, pleaded guilty to charges that he supplied nonpublic information to a friend in a $2.6 million insider trading scheme involving drug company acquisitions.

Mr. Allen, 45, of Atlanta, admitted in federal court in Manhattan last week that he shared illegal tips about the April 2008 acquisition of Millennium Pharmaceuticals Inc. by Takeda Pharmaceutical Co. and about the 2009 purchase of Sepracor Inc. by Dainippon Sumitomo Pharma Co.

“I had discussions with a personal friend and shared that information with him, and he in turn traded on that information,” he told U.S. District Judge Deborah Batts. “The motive behind my decision was primarily friendship but also for financial gain.”

Mr. Allen pleaded guilty to seven counts of securities fraud and a charge of conspiracy to commit securities fraud. His trial was set to begin March 27 before Ms. Batts.

Mr. Allen said in court last week that he betrayed his fiduciary duty to his employers by passing the tips to his friend, John Bennett, an independent-film producer. Mr. Bennett pleaded guilty to insider trading charges in November.

Charles Salmans, a spokesman for Mercer, said that his firm “is fully cooperating with the authorities in their investigation concerning a former employee. Mercer is not a subject or target of the investigation.”

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Ms. Batts last week asked Mr. Allen if he knew what he was doing was wrong and illegal.

“I did, your honor, and I deeply regret those decisions,” he said.

Ms. Batts allowed Mr. Allen to remain free on $500,000 bond and scheduled his sentencing for Aug. 20. Although each count of securities fraud carries a term of as long as 20 years in prison, the Manhattan U.S. Attorney's Office agreed as part of his plea not to seek a term of incarceration longer than 57 months.

Mr. Allen and his attorney, Brian McEvoy, declined to comment.

Mr. Bennett has acted in several films, including the 1990 courtroom drama “Presumed Innocent” and “Last Exit to Brooklyn,” according to the website IMDb.com. In 2008, he co-founded Bennett Robbins Productions, which in 2010 produced “Playback,” described on the company's website as a “supernatural thriller” starring Christian Slater.

Mr. Bennett, of Norwalk, Conn., who worked for Merrill Lynch & Co. Inc. from 2005 to 2007, was accused of making illegal trades using the information that Mr. Allen had provided.

Ms. Batts has postponed Mr. Bennett's sentencing after originally scheduling it for April. He pleaded guilty in November to one count of conspiracy to commit securities fraud and two counts of securities fraud.

During his plea hearing, Mr. Bennett said that he met his colleague at restaurants and paid him an unspecified amount of money for the tips.

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