Dick's insider trading scheme nets Hampton man a year in federal prison

A Hampton construction company owner who engaged in “frequent and risky” trading in Dick’s Sporting Goods securities, earning more than $800,000, in profits will serve a year in federal prison for insider trading.

Frank T. Poerio Jr., 63, pleaded guilty in July to four counts of security fraud. He was sentenced on Thursday in U.S. District Court in Pittsburgh.

Judge Marilyn Horan ordered Poerio to serve one year and one day in federal custody to be followed by a year of supervised release. He must serve the first 90 days after release on house arrest.

Poerio, who operated Poerio Construction Co. Inc., must also pay restitution of $823,367 and a $20,000 fine.

He was accused of insider trading using Dick’s Corp. securities after the Securities and Exchange Commission alerted federal prosecutors to suspicious trading activity in 2021.

Investigators linked Poerio’s trades to a data analyst who started working at Dick’s in 2019 analyzing store sales data, staffing and productivity, the government said. The analyst left in May 2021.

The employee shared that inside information with Poerio during “an extraordinary number of calls,” often in the days leading up to the release of the company’s earnings statements.

According to the government’s sentencing memo, Poerio engaged in 160 trades of the company’s securities, earning profits of $823,367 — “far and away the most profitable trading by Mr. Poerio [in] the history of his trading activity,” the government wrote.

“It became quickly obvious to criminal investigators that Mr. Poerio’s success in Dick’s trades was not the product of happenstance or trading sophistication,” the prosecution wrote. “The success was too unusual.”

Further, they continued, he had never previously traded in Dick’s securities.

”Mr. Poerio’s trading went beyond cheating other investors,” the government wrote. “It also exposed the insider to criminal liability from whom he gleaned [inside information], a fact evidently unapparent to him, or unappreciated.”

The prosecution said that Poerio ignored the insider’s warnings to not trade in Dick’s stock.

“Ultimately, Mr. Poerio’s unquenching greed made him hardened to the consequences of his insider trading.”

Investigators said that Poerio, on one occasion, wrote a check to the insider for $350,000.

The insider was never identified publicly or charged.

Sentencing guidelines called for 24 to 30 months in prison, but the defense sought a probationary sentence based on Poerio’s lack of a criminal history, age and medical condition, including the need for a knee replacement and poor mobility.

“Simply put, Mr. Poerio is not a person who can acclimate to prison,” the defense wrote.

Poerio also argued that he should receive a lesser sentence based on his charitable works, including time and financial contributions to the March of Dimes, Alzheimer’s Association and Epilepsy Association of Western and Central Pennsylvania.