An Oregon retiree, Alan Williams, has been sentenced to one year in prison for his involvement in a $47 million insider trading case. Williams, 79, worked with a former Nuveen LLC trader, Lawrence Billimek, to profit from confidential market orders. Williams, who previously ran trading at Sutro & Co. in San Francisco, admitted to using insider tips from Billimek to place thousands of timely stock bets.
U.S. District Judge Paul Gardephe in Manhattan presided over Williams’ sentencing. While Williams assisted prosecutors in building their case against Billimek, the magnitude of illegal trades made a sentence without jail time impossible. Billimek, 54, pleaded guilty in 2023 and received a sentence of five years and 10 months in May. The duo shared details of Nuveen’s planned buys and sells, allowing Williams to mirror positions before the firm’s own trades moved prices.
Investigators found that Williams executed 1,697 intraday stock trades flagged by the Consolidated Audit Trail (CAT), a database that logs a vast number of trade events each day. The Securities and Exchange Commission (SEC) discovered that Williams had a 97 percent “win rate” over a five-year period, a statistical improbability without the comprehensive records provided by CAT.
The SEC’s use of CAT has faced resistance from financial industry players. Citadel Securities LLC and the American Securities Association sued the SEC, arguing that the regulator lacked congressional approval to operate the database. Concerns have been raised about the potential exposure of investors’ personal or political information. With the recent appointment of Paul Atkins as SEC chair, a review of CAT’s costs and scope has been ordered.
In addition to the Nuveen case, CAT has triggered two other recent enforcement actions. In one instance, a Federal Reserve Bank examiner pleaded guilty to trading on confidential information about firms he supervised. In another case, a Florida day trader settled claims of using fake “spoof” orders to manipulate thinly traded stocks.
During his sentencing, Williams, who suffers from advanced Parkinson’s disease, expressed remorse and apologized to the court, his family, and Nuveen’s employees and clients. Despite federal guidelines suggesting a longer sentence, Williams was ordered to forfeit over $35 million in accounts held at Charles Schwab Corp. and JPMorgan Chase & Co., as well as his home in West Linn, Oregon.
The case serves as a reminder of the consequences of insider trading and the importance of regulatory tools like CAT in detecting and preventing financial misconduct. As the debate over the database’s legality and effectiveness continues, the SEC remains committed to upholding market integrity and protecting investors from fraudulent activities.