America's financial watchdog has slapped a five-year securities industry ban on Australian analyst Trent Martin for his lead role in a 2009 insider trading scandal involving a takeover by computing giant IBM.
Martin, 34, who was raised on Sydney's northern beaches and worked as a financial analyst in New York and Connecticut from 2008 to 2010, faces a maximum five years' jail when he is sentenced in a Manhattan court in March.
Martin entered a guilty plea in September to a conspiracy to commit securities fraud charge.
The US Securities and Exchange Commission (SEC) ruled this week Martin would be "barred from association with any broker, dealer, investment adviser, municipal securities dealer or transfer agent" for five years.
Martin's troubles began in 2009 when a New Zealand friend, who was working as a corporate lawyer on IBM's proposed takeover of publicly-traded Chicago-based software company SPSS Inc, told him about the secret deal.
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The Kiwi told Martin about the takeover in confidence, but Martin shared the information with his roommate, a stock broker, who spread the word to another stockbroker.
While Martin only pocketed $US7,600 in profits, others made more than $US1 million when SPSS's common stock rose 41 per cent after IBM's acquisition was announced.
