Split verdict in federal insider trading case involving Chicago attorney, friend

In a split decision, a federal judge on Thursday charged a Chicago attorney with using insider information to influence the purchase of shares in an education-technology company. , while the friend was acquitted of any charges.

The jury deliberated for about nine hours over two days before announcing the verdict on Thursday afternoon in the courtroom of US Judge Manish Shah.

The attorney, David Sargent, 38, of Glenview, was charged with six counts of securities fraud, but was acquitted of conspiracy to commit securities fraud.

His co-defendant, Christopher Klundt, 39, of San Francisco, was found not guilty on all seven counts of conspiracy and fraud, a rare result in a court where top prosecutors win. more than 90% of cases go to court.

In an emailed statement, Klundt’s attorney, Terence Campbell, wrote that Klundt and his family were “very grateful to the jury for seeing the truth in this case.”

“The evidence in this case proved that Mr. Klundt was unruly – not to mention criminal – and the jury’s decision speaks loudly to that fact,” the statement said. “We are very happy that Chris is now getting his life back after this long ordeal.”

But at the time, Sargent’s attorney called the decision “inconsistent” and said he would file an appeal for the court’s acquittal.

“The jury could not find that Mr. Klundt to Mr. Sargent, but somehow it was found that Mr. Sargent announced,” said attorney Christopher Grohman.

An indictment filed in January 2022 accused Sargent of obtaining confidential information from Klundt, a close friend and former employee, about Chegg, the California-based education technology company where Klundt was an executive. manager

The information related to the company’s earnings in the first quarter of 2020, which Klundt knew would be strong based on internal meetings he attended, the indictment alleges. The indictment included an emoji Klundt allegedly texted to Sargent after the earnings call to show faces and dollar signs for eyes.

After receiving the information from Klundt, Sargent bought a large number of shares and call options of the company’s stock before the earnings announcement, then immediately sold after the information was released for a total amount of about $ 110,000, the lawyers allege.

According to the indictment, Sargent and Klundt have been friends since attending the University of Wisconsin in Madison together. They founded an online research platform for high school and college students, and continued to work together after Sargent went on to get his law degree from the University of Illinois College of Law. Klundt was also a groomsman in Sargent’s wedding, according to the charges.

Klundt denied knowing Sargent, however, when asked by federal authorities about people who traded Chegg securities before the May 2020 earnings release, the indictment said.

jmeisner@chicagotribune.com