Former Miami Hedge Fund Manager Indicted For $4M Insider Trading, Obstruction

Kris Bortnovsky, a former Miami-based hedge fund manager, has been indicted on six counts including securities fraud, conspiracy, making false statements, and obstruction of justice related to a multi-million-dollar insider trading scheme spanning from 2017 to 2019. Prosecutors allege Bortnovsky traded stocks based on confidential information about earnings reports and merger activities of companies such as Designer Brands, Aphria Inc., and Rite Aid, which he received from insiders including a cooperating witness, David Schottenstein. After Schottenstein withdrew from his cooperation agreement, the case was initially dropped but later revived when Bortnovsky was charged with intimidating Schottenstein by following him into a synagogue while on bail, an act intended to influence his testimony. Three co-defendants have pleaded guilty, with one already sentenced to prison, and the investigation remains ongoing. If convicted, Bortnovsky faces up to 25 years in prison for securities fraud, up to 20 years for witness tampering, and an additional 10 years for obstruction of justice. The indictment was unsealed in Boston federal court, with Bortnovsky arrested in Florida and awaiting further court proceedings.