Prosecutors File Criminal Charges Against Proxy Firm Employees

Federal prosecutors have filed criminal charges against five former and current employees of Georgeson, a proxy solicitation firm, for conspiring to defraud a proxy advisory firm as well as Georgeson's own clients, according to a person familiar with the matter.

The complaint, filed in Massachusetts federal court, widens a continuing probe into the illegal trading of confidential company information. It doesn't identify Georgeson, a unit of Computershare Ltd., as the proxy solicitation firm. Georgeson hasn't been charged.

Last year, prosecutors alleged that a former employee of Georgeson as well as the firm bought more than $12,000 worth of tickets to games and concerts for a former employee of Institutional Shareholder Services Inc., the country's largest proxy-advisory firm, in exchange for confidential shareholder-voting information.

The five current and former Georgeson employees were charged with conspiracy to commit wire fraud and honest services wire fraud for conduct that happened between 2007 and 2012.

They were charged for defrauding ISS of its right to receive the "honest and faithful" services of its former employee, Brian Bennett. They also were charged with conspiring to defraud Georgeson clients by billing those clients for at least some of the cost of bribes provided to Mr. Bennett, while falsely describing those bribes as legitimate expenses.

Mr. Bennett pleaded guilty to charges a year ago. The current and former Georgeson employees named in the complaint are Donna Ackerly, Charles Garske, Richard Gottcent, Keith Haynes and Michael Sedlak.

Neither Computershare nor any of those named in the complaint could immediately be reached for comment.

Write to Anupreeta Das at anupreeta.das@wsj.com

(END) Dow Jones Newswires

July 12, 2016 12:25 ET (16:25 GMT)

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