Binette and co-defendant, Peter Talbot of East Longmeadow, allegedly reaped more than $600,000 by using insider information to buy stock in a Seattle insurance company before its purchase by Liberty Mutual Insurance two years ago.
SPRINGFIELD – A Ludlow man pleaded innocent to securities fraud and insider trading charges on Monday in federal court and will be required to pay $800 a month to subsidize the cost of his court-appointed lawyer.
Carl E. Binette, 29, pleaded innocent to a six-count indictment in U.S. District Court and was released on personal recognizance by Magistrate Judge Kenneth P. Neiman.
Binette and his co-defendant, Peter E. Talbot, of East Longmeadow, allegedly reaped more than $600,000 by using insider information to buy stock in a Seattle-based insurance company before its purchase by Liberty Mutual Insurance in 2008. Talbot is Binette’s uncle.
Both defendants said they could not afford lawyers during their first appearance three weeks ago, and Talbot – a former vice president at Hartford Investment Management Co. – said he might represent himself.
The standoff was partly resolved this week when attorney Myles Jacobson, of Northampton, agreed to take Binette’s case as a court-appointed lawyer, but only after Neiman instructed the defendant to pay $800 a month toward his legal costs.
Talbot, originally scheduled to appear Monday, was to be arraigned separately.
Neiman agreed to release Binette on personal recognizance, after assistant U.S. attorney Karen L. Goodwin said the prosecution was not requesting bail.
Binette is charged with one count of conspiracy; five counts of securities fraud, and one count of obstruction of justice.
Under federal sentencing guidelines, the defendant faces 47 to 52 months in prison with a guilty plea and 51 to 63 months if convicted a trial.
Prosecutors contend that Talbot tapped into his former employer’s confidential files and tipped his nephew to a potential acquisition of a Seattle-based insurance firm. The purchase yielded a $616,000 profit for the defendants, who had stockpiled Safeco options and common stock through an online brokerage account, according to the charges.