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Insider Trading Scheme in New York Leads to Guilty Verdict
A California-based investment firm owner and principal has been found guilty of insider trading and a securities offering fraud scheme in a New York court.
Audrey Strauss, the United States Attorney for the Southern District of New York, announced the verdict, stating that Donald Blakstad used his connections to a company insider to gather inside information that he and his associates then traded on, raking in more than $6 million in illegal profits.
The scheme unfolded from 2016 through 2018, during which time Blakstad obtained inside information about Illumina’s financial condition from Martha Bustos, a former certified public accountant who worked in the finance department at Illumina. Using this information, Blakstad made profitable trades in Illumina securities shortly before Illumina’s earnings announcements.
Blakstad’s offenses yielded more than $7 million in criminal profits. In addition, he defrauded investor clients out of more than $1 million, funds he purported would be invested but he instead misappropriated, in some cases for personal expenses.
According to the allegations contained in the Indictment and the evidence presented at trial, Blakstad devised and operated a securities offering fraud to fraudulently obtain more than $1 million from a number of investors. He fraudulently induced victim investors to make up-front, lump-sum investments for securities issued by Midcontinental Petroleum, which funds Blakstad then misappropriated, in substantial part.
Blakstad awaits sentencing for his crimes. The U.S. Attorney’s Office for the Southern District of New York will continue to work towards bringing justice to those who have been victimized by such schemes.
Defendant Name: Donald Blakstad
Criminal Charges: Insider trading and securities offering fraud scheme
City and State: New York
Exact Date: Not specified
Sentence or Outcome: Awaiting sentencing
Dollar Amounts: $7 million in criminal profits, $6 million in illegal profits, $1 million from investors
Key Facts
- State: New York
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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