(Reuters) - U.S prosecutors in Manhattan announced charges Wednesday against two men they said participated in a ring of information-sharing that led to illegal trading in a technology company acquired by IBM Corp. in 2009.

Benjamin Durant, 37, was charged with two counts of securities fraud and one count of conspiracy, while Daryl Payton, 38, was charged with three securities fraud counts and one conspiracy count.

Both were arrested during the morning, and later pleaded not guilty in Manhattan federal court. Their lawyers declined to comment following the arraignment.

Three people have already admitted to sharing and trading on secret information provided by a corporate lawyer working on IBM's purchase of software maker SPSS Inc in 2009.

The lawyer, who has not been charged, was identified in a related U.S. Securities and Exchange Commission lawsuit on Wednesday as Michael Dallas, a former associate at the New York law firm Cravath, Swaine & Moore.

IBM's full name is International Business Machines Corp. A Cravath spokeswoman did not immediately respond to a request for comment, nor did an employer listed for Dallas on his LinkedIn page. Dallas could not immediately be reached.

Authorities said Dallas shared information about the SPSS deal with his friend Trent Martin, an analyst at Royal Bank of Scotland Group Plc RBS.L, who then told his roommate Thomas Conradt, who worked at Euro Pacific Capital Inc of Westport, Connecticut.

Prosecutors say Conradt and a trading colleague, David Weishaus, bought call options on SPSS before IBM's bid was announced, and Conradt tipped Durant and Payton.

Martin, Conradt and Weishaus pleaded guilty last year to charges related to the trades, and agreed to cooperate in the investigation.

Payton and Durant were also working for Euro Pacific at the time of the trading, according to public records kept by the Financial Industry Regulatory Authority.

FINRA records show they left Euro Pacific at the same time the SEC informed the firm it was investigating them for options trades they made. The firm is not named in the indictment, which describes it as "Securities Trading Firm-1."

Andrew Schiff, director of marketing at Euro Pacific, said the firm cooperated in the investigation and has terminated employees who were implicated. He said the firm has received no indication from the SEC or FINRA that it might be a target.

According to the indictment, Durant said he had heard about SPSS while researching investment opportunities on Fidelity.com, while Payton claimed to hear about the stock from Durant.

The men then refused to answer further questions about the trades and were fired, the indictment said.

The indictment also cited an unnamed co-conspirator at Euro Capital who also bought options based on the inside information, resulting in a profit of $44,250. That person's identity could not be immediately determined.

The case is US v. Benjamin Durant and Daryl Payton, U.S. District Court, Southern District of New York, No. 12-cr-00887.

Insider trading