Ex-Nasdaq official admits insider trading

The Securities and Exchange Commission charged Donald Johnson with "with insider trading on confidential information that he stole while working in a market intelligence unit that communicates with companies in advance of market-moving public announcements."

Meanwhile the Department of Justice, working in parallel, said he had pleaded guilty to one county of securities fraud.

Authorities accused Johnson of trading through his wife's securities account on advance information of corporate leadership changes, earnings reports and forecasts, and regulatory approvals of new pharmaceutical products.

Johnson, 56, pleaded guilty before a US federal judge in Virginia, the US Justice Department said in a separate statement.

"In pleading guilty, he admitted that he purchased and sold stock in Nasdaq-listed companies based on material, non-public information, or inside information, on several different occasions from 2006 to 2009," the department said.

Johnson had been a managing director on the tech-rich Nasdaq's market intelligence desk in New York during the period.

According to authorities, Johnson frequently placed the illegal trades directly from his work computer through an online brokerage account in the name of his wife, Dalila Lopez.

"This case is the insider trading version of the fox guarding the henhouse," said Robert Khuzami, director of the SEC's enforcement division.

"Instead of protecting Nasdaq client confidences, Johnson secretly traded on client information for personal gain, even using his Nasdaq office computer to make the trades."

Johnson is scheduled to be sentenced on August 12. He faces a maximum penalty for securities fraud of 20 years in prison and a fine of $5 million.

The SEC said it was seeking repayment of the illicit profits with interest and a monetary penalty, but did not provide a figure.

According to the Justice Department, Johnson admitted that he repeatedly used the privileged information to purchase or sell short stock in various Nasdaq-listed companies shortly before the information was made public.

"He would then generate substantial gains by reversing those positions soon after the announcement," it said.

Johnson admitted he made the illegal trades on at least eight different occasions, the department said.

The companies whose securities he traded illegally were Central Garden and Pet Co.; Digene Corporation; Idexx Laboratories Inc.; Pharmaceutical Product Development Inc.; and United Therapeutics Corporation.