A broker with New York-based Spartan Capital Securities has been arrested and charged with using inside information from Morgan Stanley to make millions of dollars for his clients and hundreds of thousands of dollars for himself, according to the U.S. Attorney’s Office for the Southern District of New York and published reports.

According to a government indictment, unsealed yesterday by the U.S. District Court for the Southern District of New York, Jordan Meadow, 34, of Warren, N.J., obtained non-public information about corporate M&A activity from the bank through a man named Steven Texieira. Texieira has pleaded guilty as part of a plea agreement after the government said he took the information from the laptop of his onetime girlfriend, an executive assistant at the bank. In return for the information, Meadow would provide Texieira gifts such as Rolex watches, the indictment said.

While the unsealed indictment does not name the investment bank that was the source of the insider information, a story this week in The Wall Street Journal identified the firm as Morgan Stanley.

Using the tips from Texieira, Meadow made profits for himself of $730,000, claimed the Department of Justice and the Securities and Exchange Commission. The SEC filed a parallel civil suit against Meadow yesterday.

“In or around late July 2021,” says the government indictment, “Teixeira secretly accessed confidential work information on the laptop and learned that in less than a week, Penn National Gaming Inc. was going to acquire Score Media and Gaming Inc., a Canadian digital media company that was at the time listed on the Nasdaq Stock Market, for approximately $2.2 billion. Teixeira immediately began to purchase call option contracts in Score based on this [information] and also told several friends to purchase Score's stock.”

When the deal was announced, the U.S. Attorney said that Meadow’s holdings, as well as those of his brokerage firm clients, increased in value and they sold at huge profits. Meadow himself earned about $637,00, the DOJ said, while his brokerage clients earned $5 million.

Again using information from his girlfriend’s laptop, Teixeira learned in March 2022 that another company, enterprise software concern VMWare, was an acquisition target and worth $65 billion..

“Soon thereafter, Teixeira began to purchase call option contracts in VMWare based on this [non-public information] and also told several friends to purchase VMWare stock,” the indictment says. Another friend then shared this with Meadow, who allegedly purchased 5,000 shares of VMWare stock and options contracts between May 9 and May 18, 2022. On May 22, those stocks soared after reports emerged that Broadcom was in talks to acquire VMWare.

“Specifically, Meadow earned approximately $93,079 in illegal profits,” said the indictment. Another colleague he had shared the information with earned nearly $47,000 in profits on these trades.”

Meadow was arrested yesterday morning, according to the Department of Justice, and was charged “with six counts of securities fraud under Title 15, each of which carries a maximum sentence of 20 years in prison, one count of securities fraud under Title 18, which carries a maximum sentence of 25 years in prison; and one count of conspiracy, which carries a maximum sentence of five years in prison.”

Teixeira has pled guilty as part of a cooperation agreement, the DOJ said. The SEC said that he had bought call options on other companies besides Score Media and VMWare, including Domtar Corporation and Proofpoint Inc.

Texieira, according to the SEC, is 32, and a resident of Queens, N.Y., who worked at an intenational payment processing company as its chief compliance officer. He was certified as an anti-money laundering specialist. According to the agency’s complaint, he lived with his girlfriend and was misappropriating information from her laptop when they were both working at home during the Covid-19 pandemic.

Representatives of Spartan Capital could not be reached for comment by press time.