A former executive of the Shaw Group pleaded guilty Friday to engaging in insider trading. The conviction is the result of an ongoing federal investigation into the use of pre-merger confidential information regarding the 2012 acquisition of Shaw by Chicago Bridge and Iron Company.
U.S. Attorney Walt Green confirmed that Scott David Zeringue, 48, of Baton Rouge pleaded guilty before Chief Judge Brian A. Jackson to one count of conspiracy to commit securities fraud. Zeringue also agreed to forfeit proceeds derived from the offense.
In the Spring of 2012, Shaw began considering a potential merger. At the time, Zeringue was the vice president of construction operations for Shaw’s Plant Services Division. In late July 2012, Shaw and CB&I came to an agreement whereby CB&I acquired all outstanding shares of Shaw stock in a $3 billion deal. The merger between the two companies was publicly announced on July 30, 2012. As a result of the announcement, Shaw’s stock price rose substantially.
At today’s proceeding, Zeringue admitted that, prior to the public announcement, he received confidential inside information regarding the impending merger and passed the information on to a family member. Zeringue and the family member then both used the inside information obtained by to purchase Shaw stock and stock options. As a result of the insider trading, they profited more than $750,000.
Zeringue faces a sentence of up to five years in prison, a fine of up to $250,000, and up to three years of supervised release following imprisonment.