U.S. sunglass company founder (But not Nancy Pelosi) to plead guilty to insider trading scheme

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Jan 6, 2022, 10:44:18 PMJan 6
BOSTON, Jan 6 (Reuters) - The founder of a designer eyewear company whose
family has held investments and leadership roles in many major retailers
like DSW Inc has agreed to plead guilty to engaging in insider trading
with two Florida men using information he learned from a cousin.

Federal prosecutors in Boston disclosed in court papers on Thursday that
David Schottenstein had agreed to plead guilty https://tmsnrt.rs/3eYbhxW
to conspiring to commit securities fraud and cooperate in the prosecution
of a venture capital firm founder and an entrepreneur.

Schottenstein, who founded designer sunglasses company Privč Revaux, in a
statement provided by defense lawyer Eric Rosen said he took "full and
sole responsibility for my conduct and deeply regret my actions."

Prosecutors said Schottenstein, 38, traded on information he learned from
a cousin who sat on the boards of directors of shoe retailer DSW and
cannabis products company Green Growth Brands.

Schottenstein traded ahead of a 2017 DSW earnings announcement; the 2018
news that Albertsons Companies and Rite Aid Corp had agreed to merge; and
a 2018 tender offer by GGB for Aphria Inc, which failed, prosecutors said.

The cousin's family business belonged to an investment consortium involved
in the Rite Aid deal, which later failed.

Schottenstein made more than $600,000, the U.S. Securities and Exchange
Commission said in a related lawsuit.

Prosecutors said Schottenstein also tipped two friends - Kris Bortnovsky,
the co-founder of Sakal Capital Management, and Ryan Shapiro, who founded
inmate money transfer service provider JPay - to the expected news.

Using those tips, the SEC and prosecutors said Bortnovsky made more than
$4 million and Shapiro reaped $121,000. They were initially charged last
month and formally indicted on Thursday.

James Froccaro, Bortnovsky's lawyer, said he is innocent. Martin Weinberg,
Shapiro's attorney, said he "is factually and legally innocent."

DSW is now called Designer Brands Inc. Its executive chairman is
Schottenstein's uncle, Jay Schottenstein, who is also chief executive of
American Eagle Outfitters Inc. Neither company responded to requests for
comment. (Reporting by Nate Raymond in Boston; Editing by Bill Berkrot and
Cynthia Osterman)

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