| Read Time: 2 minutes | Broker Misconduct | SEC News |

The Securities and Exchange Commission (SEC) filed suit against Anthony Andrade of Rehoboth, Massachusetts alleging that he illegally tipped inside information to three friends and business associates about Bancorp Rhode Island’s (Bancorp RI) potential acquisition. The SEC alleged that the three friends traded based upon the information Mr. Andrade provided for them and profited when Bancorp RI’s stock price increased.

The SEC alleged that Mr. Andrade breached his fiduciary duty by providing material that was not public information to his friends and business associates. All of the people he provided this information to knew that he was a member of Bancorp RI’s board of directors and that Mr. Andrade had no business purpose for providing them with this information.

According to the SEC, after receiving the information from Mr. Andrade, the Defendants traded on it by purchasing Bancorp RI stock in advance of the public announcement of the company’s acquisition. As a result of Mr. Andrade’s actions, the Defendants had the upper hand and unfair advantage of buying on material, non-public inside information prior to the acquisition’s announcement to the general public and the resultant price increase.

The SEC alleged that on the day the Merger of Bancorp RI and Brookline Bancorp was announced, the closing price of Bancorp RI’s shares was $44 per share. According to the SEC, with the $44 share price, the Defendants and Mr. Andrade illegally gained over $80,000 when they, directly or indirectly, purchased Bancorp RI shares.

The SEC charged Mr. Andrade and three other Defendants with violating Section 10(b) of the Securities Exchange Act and Rule 10b-5. Two of the Defendants settled the SEC’s charges and agreed to disgorge over $64,000 of their profits and to pay civil penalties of the same amount.

Attorney Pearce began his career at the SEC as an enforcement attorney more than 40 years ago. His SEC defense law practice clients have included public companies and their officers and directors, broker-dealers, investment advisors, and individuals being investigated in connection with their personal securities transactions. He has broad, extensive experience in matters arising from alleged 10b-5 fraud violations including, “insider trading,” Section 16(b) “short swing profit,” and Section 14 “proxy rule” violations as well as Section 9 “market manipulation” cases.

Have you have been contacted by the SEC or believe that you may be subject of an SEC investigation? If so, call Mr. Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce defends individuals and entities who may be the subject of an SEC investigation or enforcement action regarding their alleged involvement in securities laws violations.

This blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 40 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to representing investors and financial industry professionals throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

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Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $125 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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