American News
Ex-Minnesota fitness firm VP, friends indicted in Chicago
Flag of Minnesota (Photo by Wikimedia Commons, Public Domain)
CHICAGO — A former executive at a major Minnesota-based fitness firm and eight other people are accused in a new federal indictment of using insider information to make nearly $900,000 by scooping up stocks before word of the company’s sale pushed share prices higher in 2015, according to charging documents unsealed Friday in Chicago.
Shane Fleming, 54, the then-vice-president for corporate sales at Life Time Fitness Inc., allegedly passed the insider tip about the company’s pending sale earlier in 2015 to a friend. That friend then allegedly told his girlfriend and other friends. All nine defendants are charged with conspiracy and each faces at least one count of securities fraud. A conviction on a single fraud count carries a maximum 20-year prison term.
The company share price rose from around $58 on March 5, 2015, to around $70 one day later after a newspaper first reported the pending sale. Life Time Fitness, which owns fitness centres across the U.S. and Canada, officially announced on March 16 of the same year that two private equity firms were buying all company shares for $72.10 per share.
The nine people charged purchased hundreds of call options in Life Time Fitness stock from Feb. 25, 2015, to March 3, 2015, according to the indictment. The options were traded on the Chicago Board Options Exchange, while the company’s common stock was traded on the New York Stock Exchange.
The acting U.S. attorney in Chicago, Joel R. Levin, said Friday in a statement regarding the charges that ensuring the integrity of markets is “a core principle upon which the American financial system is built.”
Hours after the charges were announced, Life Time Fitness spokesman Jason Thunstrom said that Fleming left the firm last year, though he didn’t elaborate. He added that Life Time Fitness has co-operated with federal authorities on the matter. He declined to comment on the charges.
Court records on Friday didn’t name attorneys for Fleming or the other defendants. Fleming lives in Chanhassen, Minnesota, where Life Time Fitness has its headquarters. As for the other defendants, four live in the Chicago area, two in Mexico, one in California and one in New York.
