This story has been updated to include a statement from Illumina.
NEW YORK – A former Illumina employee has pleaded guilty to participating in an insider trading scheme that allegedly generated profits of $6.2 million.
On Wednesday, the US Attorney's Office for the Southern District of New York (SDNY) unsealed criminal charges against Martha Patricia Bustos, a certified public accountant, alleging that from 2016 to 2018, she tipped off her friend Donald Blakstad with confidential revenue information.
In a statement announcing Blakstad's arrest Wednesday morning in San Diego, SDNY said Bustos pleaded guilty on June 28 to conspiracy to commit securities fraud, securities fraud, and conspiracy to commit wire fraud. She is cooperating with the government, SDNY added.
The combined charges carry maximum penalties of 45 years in prison and up to $5.5 million in fines.
The US Securities and Exchange Commission has also filed civil charges against Bustos and Blakstad.
"In exchange for extravagant gifts, Bustos allegedly tipped Blakstad in advance of four quarterly Illumina financial performance announcements from April 2016 to July 2018," the SEC said in a statement. "Based on those tips of inside information, Blakstad allegedly purchased Illumina securities using accounts held by business associates and acquaintances to conceal his involvement."
"Illumina has a strict insider trading policy and does not allow any form of unlawful insider trading by company personnel," an Illumina spokesperson said in an email. "Illumina is fully cooperating with the government's investigation." Illumina added that Bustos was not an executive at the firm.
According to the SEC complaint, Blakstad personally gained approximately $4 million and allegedly tipped off at least four other friends and business associates who made $2.2 million.
The SEC said it discovered the alleged activities using advanced software to analyze trading data.