The
former CIO of the Wyoming Retirement System was sentenced Thursday to
supervised release and community service for his involvement in an insider
trading scheme.
John Johnson was charged with four counts of securities fraud and conspiracy to commit securities fraud for activities that occurred in 2008—two years prior to his tenure at the $7.5 billion pension fund. He had served as CIO from 2010 to 2013.
After becoming a key witness for a larger insider trading scheme over the last few years, Johnson was sentenced to two years of supervised release and 50 hours of community service.
The New York district judge also recommended Johnson speak to “business and law students about his experience as someone who traded in inside information and got caught.”
“I understand I made a giant mistake and a significant lapse in judgment,” Johnson said in court Thursday, according to Reuters.
The former CIO was also ordered to forfeit more than $137,000.
According to court documents, Johnson received a tip from Matthew Teeple in 2008, then-analyst at hedge fund Artis Capital, about an upcoming merger of two technology firms.
While speaking with Teeple, Johnson traded on the inside information and made $136,000 in illegal profits.
Since pleading guilty to both charges in 2013, Johnson provided “devastating direct evidence against Teeple,” US Attorney Preet Bharara wrote in a memo.
“Johnson’s cooperation with the government was exemplary,” he said. “It easily surpasses the requirement of ‘substantial assistance’.”
Bharara added that Johnson also provided the government with information that would be helpful to “use as background in additional investigations into insider trading at hedge funds and related institutions.”
“This was the most sensible, fair, and just sentence given all of the circumstances,” Johnson’s lawyer told CIO. “I’m extremely pleased that Mr. Johnson can now move forward with his life and begin to put this incident behind him.”
Johnson has been living in Colorado since losing his position at the Wyoming pension fund over the charges in March 2013.
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