Oregon Retiree Sentenced to Prison in $47 Million Insider Trading Scandal

In a major insider trading case that shook the financial world, a 79-year-old Oregon retiree, Alan Williams, was sentenced on Monday to one year in prison. The case marks the conclusion of a $47 million insider trading investigation involving confidential market orders.

Williams, a former head of trading at Sutro & Co. in San Francisco, stood before U.S. District Judge Paul Gardephe in Manhattan. Last year, he admitted to profiting from insider information supplied by Lawrence Billimek, a former trader at Nuveen LLC. Using these confidential tips, Williams placed thousands of well-timed stock trades that netted him massive profits.

While Judge Gardephe acknowledged Williams' cooperation in helping prosecutors build their case against Billimek, he emphasized that the scale of Williams' illegal activity was too extensive to avoid prison time.

Billimek, 54, pleaded guilty in 2023 and was sentenced to five years and 10 months behind bars earlier this year. From 2018 to 2023, he leaked Nuveen’s pending buy and sell orders to Williams, who quickly mirrored those trades before Nuveen's actions moved the stock prices.

Authorities discovered that Williams executed nearly 1,700 intraday trades, flagged by the Consolidated Audit Trail (CAT) a powerful system capable of tracking up to 500 billion trades daily.

According to the SEC, Williams boasted a staggering 97% win rate over five years a statistical anomaly with odds of less than one in a trillion if achieved randomly. Experts argue that without CAT’s comprehensive tracking, such suspicious activity might have gone undetected.

SEC’s Trade Tracking System Under Fire

Despite its success in catching offenders, CAT has faced growing opposition. In 2023, Citadel Securities LLC and the American Securities Association sued the SEC, arguing the agency lacked congressional authorization for the database.

Concerns have been raised, particularly among Republican lawmakers, that CAT could expose investors' private and political information. The debate has intensified amid Donald Trump’s political resurgence and the release of the conservative “Project 2025” policy platform.

Paul Atkins, who was sworn in as SEC Chairman last week, expressed concerns about CAT’s ballooning costs and expanding reach during his Senate confirmation hearing. He has since ordered a full review of the project.

Even before Atkins assumed office, financial industry groups were pressuring the SEC. In February, the Securities Industry and Financial Markets Association pushed the commission to suspend CAT-related fee collections while decisions about its future were being made. The SEC has also taken steps to remove personal identifiers like names and birth dates from CAT data.

CAT Leads to More High-Profile Cases

In addition to the Nuveen case, CAT has been instrumental in other major enforcement actions. In November, a former Federal Reserve Bank examiner pleaded guilty to trading on confidential supervisory information. A month later, a Florida day trader settled allegations that he used thousands of fake "spoof" orders to manipulate thinly traded stocks.

Williams Apologizes but Faces Consequences

Standing before Judge Gardephe, Williams, who suffers from advanced Parkinson’s disease, expressed deep remorse, apologizing to the court, his family, and the employees and clients of Nuveen. "I'm embarrassed and ashamed," he said.

Federal sentencing guidelines recommended a term of 57 to 71 months, with a maximum possible sentence of 75 years, though such harsh penalties are rare in white-collar cases. Prosecutors revealed that Williams and Billimek used prepaid “burner” phones to avoid detection, including one instance where they earned over $55,000 by shorting shares of Match Group Inc. shortly before Nuveen sold a large block of stock.

Williams had pleaded for leniency, describing himself as "an uncommonly decent and giving man." However, Judge Gardephe rejected the plea, citing the "blatant nature" and volume of the illegal trades.

Later that day, a forfeiture order was issued. Williams agreed to surrender over $35 million held in Charles Schwab and JPMorgan Chase accounts, along with a sprawling six-bedroom, six-bathroom home located in West Linn, Oregon.