Watertown Resident Involved in Alleged Insider Trading Conspiracy

A Watertown resident was arrested Wednesday for his allegedly buying and selling shares of Wainwright Bank & Trust Company based on a tip that the company would be acquired.

A Boston-area real estate developer and former owner of R&B Construction, Robert H. Bray, 77, was tipped by a Boston-based Eastern Bank Corp. executive that Wainwright would be acquired two weeks before the acquisition was publicly announced in June 2010.

Bray bought 25,000 shares of Wainwright stock the next trading day and purchased 31,000 Wainwright shares over the next two weeks at prices from $8.85 and $9.90 per share.

His involvement accounted for about 56 percent of the total trading volume in Wainwright shares during that time, according to a U.S. District Attorney’s Office press release.

Bray involved himself in the scheme to “get rich quick,” said Vincent B. Lisi, Special Agent in charge of the Federal Bureau of Investigation, Boston Field Division in a press release.

“Time and time again, FBI agents arrest those who trade on insider information,” Lisi said. “Today’s arrest is another example of the FBI’s efforts to protect the integrity and transparency of the financial markets.”

Bray sold his shares for over a $300,000 profit when Eastern Bank acquired Wainwright for $19 per share in cash on June 29, 2010.

“Whether overheard in a board room, bar room, or county club, trading on insider information is a federal felony,” said United States Attorney Carmen M. Ortiz in a press release.

“Today’s arrest makes clear our commitment to keeping the financial markets fair for everyone – and to protecting investors who put their money to work in the markets each and every day, without the benefit of well-placed friends willing to tip them off about pending deals,” Ortiz said.

Bray faces a maximum sentence of five years in prison, three years of supervised release and a fine of the greater of $250,000 or twice the gross gain or loss.

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