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Louis W. Zehil, a former securities lawyer and partner at McGuireWoods, pleaded guilty to fraud and conspiracy to commit securities fraud in the Southern District of New York Monday.
The New York Law Journal reports Zehil admitted to making $10 million in illegal profits by using his role as counsel to illegally trade shares in seven companies that he helped to structure private investment in public equity, or PIPE, transactions between January 2006 and February 2007.
“I knew what I was doing was wrong,” Zehil told Judge Deborah A. Batts. “I take full responsibility for my actions.”
According to Bloomberg, PIPE shares must be registered with the U.S. Securities and Exchange Commission before they can be publicly traded. However, Zehil purchased his clients shares and sold them before being registered. Then, he and an unnamed associate sent opinion letters to transfer agents that they knew contained misrepresentations.
“My misrepresentation permitted me to have an improper head start” on other investors, Zehill said, according to Bloomberg. “I know that what I was doing was wrong and I take full responsibility for my actions.”
Zehill was a partner at McGuireWoods from April 2004 to February 2007. He is facing a maximum prison sentence of 20 years for securities fraud and a maximum of five years for conspiracy.
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