Bank Executive Arrested for Insider Trading

It is alleged that John Patrick O’Neill, 64, of Belmont, secretly tipped off a friend about the Eastern Bank’s plan to purchase Wainwright Bank & Trust Co. in 2010.

According to a press release, O’Neill informed his friend during a face-to-face encounter at the Watertown country club where both men are members. The conversation reportedly took place over the weekend of June 11, 2010, more than two weeks before the acquisition was publicly announced.

O’Neill’s friend bought 31,000 Wainwright shares over the next two weeks, accounting for more than half of the total trading volume in Wainwright shares during that period.

On June 29, 2010, Eastern Bank announced its agreement to acquire Wainwright for $19 per share in cash, a premium of nearly 100% over the stock’s prior closing price. O’Neill’s friend, referred to as CC-1, ultimately sold his shares for a profit of more than $300,000.

O’Neill, who was a Senior Vice President and Senior Credit Officer at Eastern Bank, is charged with conspiracy to commit securities fraud. He is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Read the U.S. Attorney’s Office, District of Massachusetts press release here.