A former executive at the Life Time fitness chain has been accused of insider trading along with eight others in a scheme that enriched them by nearly $900,000 in illegal profits.

The charges against Shane Fleming and the others, who were not employees of the Chanhassen-based fitness firm, were laid out in a federal indictment unsealed Friday in Chicago and first reported by the Associated Press.

Prosecutors say Fleming, 54, then a vice president of sales, passed along a series of tips in advance of Life Time’s 2015 acquisition by a private investment group. The information allowed the defendants to buy shares in the company and time them to benefit from rising stock prices as a result of the sale.

Fleming has not worked at Life Time for nearly a year, according to a company spokesman, who said Life Time fully cooperated with the government’s law enforcement effort.

“Life Time had clear insider practices in place,” Life Time’s Jason Thunstrom said. “Those practices prohibited tipping or trading on any material nonpublic information, including information concerning a merger or acquisition, such as the one we went through.”

Thunstrom said Fleming “understood and agreed to abide by that policy, with respect to the transaction.”

According to charges filed by the U.S. attorney’s office in Chicago, Fleming learned of the company’s negotiations on or before Feb. 23 when he met with an in-house lawyer at Life Time to discuss issues related to the acquisition.

Fleming passed along information to what prosecutors described as a longtime friend and business partner, who then arranged for others to buy shares and call options as tips were passed from one defendant to another, according to the case, which was brought by the Securities and Exchange Commission.

Life Time’s stock shot up after the Wall Street Journal wrote a story about discussions to take the company private, and shares increased from about $58 to $70 within days. The company announced a deal on March 16, 2015.

Fleming was paid about $10,000 out of the illegal profits, according to the complaint.

Fleming did not return a call for comment.


Star Tribune staff writer Patrick Kennedy contributed to this story.