Trent Martin, an Australian research analyst, was indicted on Wednesday in the U.S. over alleged insider trading linked to International Business Machines' (IBM) purchase of SPSS for $1.2 billion. SPSS is an analytics software company.

Federal prosecutors in Manhattan said in a statement that Mr Martin is facing conspiracy and securities fraud charges besides a civil suit filed by the U.S. Securities and Exchange Commission.

Mr Martin, 33, bought SPSS shares in June 2009 based on confidential information provided by a corporate lawyer who was part of the IBM deal and was his close friend. He eventually shared the tip with Thomas Conradt, his Manhattan roommate and a stock broker, who in turn also shared the information with another broker.

Because of the insider information, Mr Martin, Mr Conradt and the third broker identified as David Weishaus earned about $2 million in illegal profits after the two companies released a press statement on July 27, 2009 of IBM's plan to purchase SPSS at about $50 a share.

Mr Martin, who used to work in a New York brokerage until September 2009, moved to another brokerage company in Connecticut until November 2010, was arrested on Dec 22 in Hong Kong after he fled the U.S. upon learning of the court cases. If convicted of the charges, he could be imprisoned for up to 20 years for securities fraud, the most serious charge.

The two other brokers pleaded not guilty to similar charges filed against them.