Feds Sue Luxury Watch Dealer For Insider Trading Involving Illumina Shares

San Diego Union-Tribune (CA)

The U.S. Securities and Exchange Commission has filed a lawsuit against a Westlake Village luxury watch dealer for allegedly participating in an insider trading scheme involving San Diego's Illumina.

Robert Maron, 62, generated more than $1 million in profits by trading Illumina securities instruments based on non-public information ahead of the company's financial report in October 2016, according to the SEC.

The SEC complaint contends that Martha Patricia Bustos, 33, a former Illumina accountant, tipped close friend Donald Blakstad in advance of quarterly earnings.

Blakstad, in turn, tipped Maron, who purchased Illumina "put" options and realized the profits when the company's share price dropped.

Bustos and Blakstad were sued by the SEC in July 2019. That complaint alleges Bustos tipped Blakstad four times between 2016 and 2018 with significant inside information prior to Illumina releasing quarterly financial reports.

Armed with that information, Blakstad, 62, worked with two others to conceal his trading, according to the SEC, pocketing roughly $4 million. He also tipped Maron and at least three other unnamed traders.

The SEC contends Blakstad rewarded Bustos, paying nearly $35,000 in airfare, hotels and meals during a trip to New York for her and several friends. She also received $12,000 in cash and a luxury brand handbag.

Parallel criminal charges were filed in the Southern District of New York against Bustos and Blakstad. Bustos, who worked for Illumina for six years, pleaded guilty in 2019 and cooperated with the government.

Blakstad, the owner of a California energy investment firm called Midcontinental Petroleum, was convicted by a jury in June of wire fraud, securities fraud and conspiracy charges. Both are awaiting sentencing.

This story originally appeared in San Diego Union-Tribune.