Former eBay exec charged with insider trading

Posted: April 27, 2014

A former eBay executive was charged Friday with criminal and civil insider-trading violations tied to the auction website's 2011 acquisition of a King of Prussia-based e-commerce firm.

Federal authorities allege Christopher Saridakis, 45, of Greenville, Del., then head of marketing solutions at GSI Commerce, tipped off two friends and two relatives to the pending $2.4 billion deal and urged them to buy stock in advance of the sale.

When the acquisition was announced in June 2011, GSI's stock price jumped more than 50 percent, leading to more than $300,000 in illegal profits for the traders, according to court filings unsealed Friday.

Saridakis, who was named a senior vice president at San Jose, Calif.-based eBay after GSI's purchase, is not accused of personally profiting from the inside information. He has since resigned from his post.

"Saridakis chose to dole out confidential, market-moving information to enrich relatives and friends, and the nonpublic details then spread further through multiple levels of tippers and tippees," said Scott Friestad, associate director of the SEC's enforcement division.

The criminal charges against Saridakis were filed Friday in a criminal information, a move that typically suggests the accused has agreed to plead guilty as part of a deal with prosecutors.

His lawyer, Richard J. Zack, declined to comment on his client's intentions. Should he be convicted, Saridakis could face up to 20 years in prison and $5 million in fines.

In a parallel move Friday, the Securities and Exchange Commission announced Saridakis had agreed to pay $664,822 - an amount pegged to the profits made by others - to settle civil claims against him.

"Mr. Saridakis accepts responsibility for his conduct in this matter," Zack said in a statement Friday. "He has done everything he can to make the situation right and will continue to do so. He deeply regrets the effect of his mistake on family and friends."

The SEC suit - which also names Jules Gardner, 53, of Villanova, as a defendant - details a text-message conversation between him and Saridakis just days before the sale of GSI was announced.

The two met while working at PointRoll Inc., a mobile marketing company founded by Gardner and sold to media giant Gannett Co. in 2005.

Do you "own our shares?" Saridakis is quoted as asking Gardner on March 20, 2011. When Gardner replied he did not, Saridakis replied with texts saying "you should" and "soon."

Gardner, who is cooperating with the investigation, has agreed to pay back the $259,054 he made from the trade, the SEC said Friday.

Four other traders who either received tips from Saridakis or from others he had told have also agreed to forfeit nearly $160,000 in stock-trade profits.

GSI Commerce, which specializes in creating online shopping sites for brick-and-mortar retailers, was renamed eBay Enterprise after its acquisition.


jroebuck@phillynews.com

215-925-2649

@jeremyrroebuck

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