Two ex-brokers accused of running a $1 million insider-trading scheme tied to International Business Machines Corp.’s acquisition of SPSS Inc. were criminally charged and sued by U.S. authorities.

Thomas Conradt, 34, a Denver lawyer, and David Weishaus, 32, of Baltimore, described by the government as longtime friends, were arrested today by the Federal Bureau of Investigation, Peter Donald, an FBI spokesman, said.

The U.S. Securities and Exchange Commission alleged in a civil suit filed today in federal court in Manhattan that the men learned that IBM had retained a law firm in connection with its possible acquisition of the software company before it was announced.

IBM and SPSS issued a press release on July 27, 2009, on IBM’s plan to buy SPSS for about $1.2 billion, or $50 a share.

The two men had learned of the deal two months earlier from a roommate of Conradt’s who got the information from an associate at a law firm that worked on the deal, the SEC alleges.

Conradt passed the information to Weishaus and at least three others who then traded in SPSS stock in July, the regulators said.
“Ultimately, the trades placed by Conradt, Weishaus and three registered representatives resulted in ill-gotten gains exceeding $1 million,” the SEC alleged.

Authorities say the pair attended law school together.

A lawyer for Weishaus declined to comment. Conradt’s lawyer didn’t immediately respond to a message seeking comment.

The head of the FBI’s New York office, Mary Galligan, says the defendants weren’t shy about their greed.

She says Weishaus messaged Conradt the day the merger was announced publicly.

According to Galligan, he said: “I need that Lexus” and “I don’t want to go to jail.”

IBM employs some 10,000 people across North Carolina.

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(Bloomberg and The AP contributed to this report.)