A former eBay executive faces up to 20 years in prison and $5 million in fines after pleading guilty Friday to insider-trading violations tied to the auction website's 2011 acquisition of a King of Prussia-based e-commerce firm.
Christopher Saridakis, 45, of Greenville, Del., then head of marketing solutions at GSI Commerce, tipped off two friends and two relatives to the pending $2.4 billion deal and urged them to buy stock in advance of the sale.
When the acquisition was announced in June 2011, GSI's stock price jumped more than 50 percent, leading to more than $300,000 in illegal profits for the traders.
Saridakis, who was named a senior vice president at San Jose, Calif.-based eBay after GSI's purchase, was not accused of profiting from the inside information. He has since resigned from his post.
His guilty plea to securities fraud charges in U.S. District Court on Friday comes one week after Saridakis agreed to pay $664,822 - an amount pegged to the profit made by others - to settle civil claims from the U.S. Securities and Exchange Commission. He is set to be sentenced in his criminal case Sept. 19.
"Mr. Saridakis accepts responsibility for his conduct in this matter," his lawyer, Richard J. Zack, said in a statement at the time. "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 family and friends."
The SEC suit - which also named Jules Gardner, 53, of Villanova, as a defendant - details a text-message exchange between him and Saridakis days before the sale of GSI was announced.
The two met while working at PointRoll Inc., a mobile marketing company founded by Gardner and sold in 2005 to media giant Gannett Co.
Do you "own our shares?" Saridakis is quoted as asking Gardner on March 20, 2011.
When Gardner replied he did not, Saridakis replied with texts saying "you should" and "soon."
Gardner, who is cooperating with the investigation, has agreed to pay back the $259,054 he made from the trade, the SEC said Friday. He has not been charged in the criminal case.
Four other traders who either received tips from Saridakis or from others he had told have also agreed to forfeit nearly $160,000 in stock-trade profits.
GSI Commerce, which specializes in creating online shopping sites for brick-and-mortar retailers, was renamed eBay Enterprise after its acquisition.