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UPDATE 1-Former Green Mountain employee charged in insider trading scheme
08/02/2013 Email this story  |  Printable Version

By Siddharth Cavale and Atossa Araxia Abrahamian

NEW YORK, Aug 2 (Reuters) - A former employee of Green Mountain Coffee Roasters Inc has been charged with participating in an insider trading scheme that netted him and a friend $7 million, the U.S. Securities and Exchange Commission said on Friday.

Chad McGinnis, who worked as a systems administrator in the coffee company's Information Technology department, and his friend Sergey Pugach, of Hamden, Connecticut, obtained quarterly earnings data from shared folders on Green Mountain's server and used it to trade in advance of their public release before 12 of the past 13 earnings announcements since 2010, the SEC said.

According to the SEC, McGinnis and Pugach communicated frequently by phone and email around the time of the company's earnings announcements and used personal online brokerage accounts to carry out the trades.

They also used their spouses' cell phones to talk ahead of trading, the SEC complaint said.

Green Mountain said it was cooperating fully with the government's investigation and that there had been no allegation of wrongdoing on the part of the company.

"All indications are that this case involves an irresponsible individual acting alone and we have no reason to believe anyone else associated with the company was involved," Brian P. Kelley, Green Mountain's chief executive, said in a statement. "We are appalled at the alleged actions of this individual."

McGinnis, who lives in Morrisville, Vermont, held a manager-level position before Green Mountain fired him for violating its insider trading policy, the company said.

A hearing has been set for August 7.


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