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NY investor firm exec charged with insider trading

By WTOP Staff

LARRY NEUMEISTER
Associated Press

NEW YORK (AP) — The director of market intelligence at an investor relations firm was arrested on insider trading charges Tuesday and accused of using drafts of press releases to illegally earn nearly a million dollars.

Michael Lucarelli, 51, was a director at Manhattan-based Lippert/Heilshorn & Associates Inc. when he made the illegal trades over the last year, prosecutors said as they announced 13 securities fraud charges.

Lucarelli, wearing a tank top, slacks and sandals, was released on $500,000 bail after an initial appearance in federal court in Manhattan.

His attorney, Oscar Michelen, said in court that his client pleads not guilty. Outside court, Michelen said he would not comment on the charges until he can investigate them and speak with Lucarelli.

A magistrate judge ordered strict pretrial drug testing after a prosecutor said unidentified white powder was found when he was arrested at his Manhattan residence. As he left the courthouse, Lucarelli ran out of his sandals and left them behind as he fled photographers.

Authorities said Lucarelli made multiple illegal trades using information from the working drafts of press releases about upcoming earnings reports that his company prepared for its clients. They said he used four different brokerage accounts to carry out the trades, although two of the accounts were suspended in March by a brokerage firm that was not identified in court papers.

Prosecutors said he made more than $500,000 illegally by making trades in the securities of 13 of the firm’s clients, while the Securities and Exchange Commission said in a civil complaint that his illicit earnings topped $950,000.

“Despite the well-known parade of convicted insider trading perpetrators over the past several years, Michael Lucarelli was not deterred and violated both his company’s policies and his responsibility to its clients,” U.S. Attorney Preet Bharara said in a release.

George Venizelos, head of the New York FBI office, said that rather than doing his job, Lucarelli “spent his days setting up brokerage accounts to make illegal trades using inside information from unwitting clients.”

Keith Lippert, a founding partner at Lippert/Heilshorn & Associates, said authorities told the company about the insider trading on July 22. Two days later, the FBI obtained a search warrant to search Lucarelli’s office, a criminal complaint said. Agents said they found a locked briefcase containing a draft press release for earnings results of Trex Co. Inc., a Winchester, Virginia-based manufacturer of decking, railings and other outdoor items.

Agents photographed the press release and returned it to the briefcase “so as not to prematurely advise Lucarelli of the existence of our investigation,” FBI Agent Edmund Rom wrote in the complaint filed in federal court in Manhattan.

Between July 25 and Aug. 4, the day Trex released its earnings report to the public, Lucarelli traded the company’s stock, earning profits of $89,487, Rom said.

Lippert said his company, which employees about 28 people, had “fully cooperated with the authorities on every request,” including providing access to information, access to company offices and “even making sure we kept Mr. Lucarelli in our employ until this day happened so it wouldn’t hinder the investigation.”

Lippert added: “We have insider trading policies in place to protect the integrity of clients and employees. It’s very disconcerting when you have these policies in place that somebody would consciously violate them.”

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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