A Wells Fargo & Co. investment banker was at the center of a 10-person insider-trading ring that took in $11 million in profits from tips on pending mergers, U.S. regulators said.

John W. Femenia from March 2010 to July 2012 passed his friends confidential information about four deals involving Wells Fargo clients, the Securities and Exchange Commission said Wednesday in a complaint filed in U.S. District Court in North Carolina. The SEC sued nine others for taking part in the ring.

"Here you have an investment banker who clearly knew better that inside information can't form the basis of trading decisions," William Hicks, associate director for enforcement in the SEC's Atlanta office, said in a statement. "Instead he basically started a phone tree of nonpublic information."

Femenia, 30, typically made his first call to disseminate the tips to Shawn Hegedus, a longtime friend who worked as a registered broker, the SEC said. He and Hegedus, who was also named as a defendant in the lawsuit, then tipped other friends who passed the information to their own friends or family members in a ring that spread across five states.

In some instances, Femenia and Hegedus, 31, were paid portions of illegal trading proceeds in exchange for the tips, which involved acquisitions of ATC Technology Corp. in 2010, Smurfit-Stone Container Corp. and K-Sea Transportation Partners in 2011, and Shaw Group Inc. this year.

Femenia worked for Wells Fargo in Charlotte, N.C., when most of the alleged activity occurred and later in New York where he lives now, according to the SEC. He didn't return a call to his office seeking comment on the SEC's case, and Mary Eshet, a Wells Fargo spokeswoman, declined to comment. Efforts to reach Hegedus by telephone weren't immediately successful.

Wells Fargo is based in San Francisco.