Seekonk Real Estate Lawyer Charged with Insider Trading

A Seekonk real estate lawyer, along with three others, including a former member of the Board of Directors of Bancorp Rhode Island, have been charged with insider trading by the Securities and Exchange Commission for gobbling up shares of BankRI before a merger was announced in April of 2011.

According to a civil action complaint filed in U.S. District Court in Providence, the SEC alleges that Anthony Andrade, of Rehoboth, Mass., a former board member of the bank, tipped off three longtime friends that Bancorp Rhode Island was about to be bought by Brookline Bankcorp.

Those friends: real estate investor Robert Kielbasa of Portsmouth, Advanced Print Technologies co-founder Fred Goldwin of Wilimgton, DE; and Rhode Island real estate lawyer Kenneth Rampino, of Seekonk, all used that insider information to buy shares in Bancorp Rhode Island and ended up with handsome profits after the deal was announced and the share price increased $13.29 per share — 41 percent — on April 20.

Keilbasa, 59, has been a business partner with Andrade for years. The two met in 2000 when they jointly invested in a business property in Portsmouth and since then have “bought, sold and/or managed real estate investments together in Rhode Island and Florida,” according to the complaint.

On April 12, Kielbasa placed a two-minute call to Andrade, phone records show. Six minutes later, Kielbasa got a call from Andrade’s business that lasted for four minutes.

One minute after that call ended, Kielbasa made his first-ever purchase of Bancorp RI stock by calling his investment advisor, identified as “S.H.” and directing him to buy 1,000 shares.

“Kielbasa told S.H. that he had a friend who suggested Bancorp RI would be a good investment,” the complaint alleges.

Kielbasa bought the shares at an average price of $30.24 per share, for a total of $30,240 in a Fidelity brokerage account.

He then made two more purchases three days later, a day after Andrade had met with the bank’s board of directors to review competing offers to buy the bank from Brookline Bancorp and a company identified as “Company A.”

On April 15, Kielbasa made two more orders, splitting his buy orders between two different brokerage accounts held in different names and financial institutions. All of the orders were made after brief conversations on the phone with Andrade.

In total, Kielbasa bought 3,000 shares of Bankcorp RI and ended with a profit of $39,645 based on the $44 share price after the deal was announced.

The SEC questioned Kielbasa after an investigation into his trading activities and he refused to testify, reciting his Fifth Amendment privilege against self-incrimination.

The charges against Goldwyn and Rampino follow a similar trajectory. Goldwyn has known Andrade for more than 20 years and they have been business partners and co-owners of the Advanced Print Technologies business since 2003.

The complaint alleges that Goldwyn unjustly gained $21,458 by committing insider trading. He also reportedly used his son’s name to open a custodial account in which he received $2,107 in ill-gotten gains.

Rampino and Andrade also have more than 20-years of friendship, the complaint states.

As a real estate lawyer, Andrade has used Rampino for real estate transactions through the years and the two have traded favors, such as when Rampino provided free legal advice for a ”problematic real estate issue Andrade’s son was having,” the SEC complaint alleges. During the same time period, Andrade personally went with one of his property service vendors and helped resolve a septic issue for Rampino.

Rampino reportedly bought 1,500 shares of Bancorp RI shares and received $18,959 in ill-gotten gains from the insider information.

The complaint calls for Andrade to be barred from serving as an officer or director of a public company and for his three associates to to return any ill-gotten gains.

Goldwyn and Kielbasa have agreed to settle the charges and will return profits and pay interest and penalties totaling $50,301 and $84,625 respectively.

The complaint can be read HERE: http://www.sec.gov/litigation/complaints/2015/comp23278.pdf