Articles Tagged with Insider Trading Defense Attorney

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The Securities and Exchange Commission (SEC) has brought insider trading charges against a former software executive, Christopher Salis, and his three close friends, Douglas Miller, Edward Miller and Barrett Biehl, who allegedly made  over half a million dollars based upon an illegal tip regarding a corporate merger.

According to the SEC complaint, Christopher Salis was a global vice president at SAP America, Inc. (SAP) when he became aware of plans for an upcoming SAP merger with Concur Technologies, Inc. (Concur).  Salis allegedly tipped his close friend, Douglas Miller, who allegedly then passed on the tip to his brother, Edward Miller and another friend, Barrett Biehl.  Douglas Miller and his brother, Edward, allegedly rushed to open brokerage accounts in order to quickly begin trading in securities of Concur based upon the tip from Mr. Salis.  In total, the complaint notes that the tip from Mr. Salis yielded illicit trading profits of over $545,000 for Douglas and Edward Miller, Barrett Biehl, the Miller’s parents and another friend.  The SEC complaint further alleges that Mr. Salis received at least $10,400 in kickbacks and his startup company later received nearly $80,000 from Mr. Miller and his family.  Continue reading →

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The Securities and Exchange Commission (SEC) has brought charges against two former Wells Fargo employees, Gregory T. Bolan Jr. (Bolan) of Nashville, Tennessee and Joseph C. Ruggieri (Ruggieri) of Raleigh, North Carolina, for an alleged insider trading scheme involving buying or short selling stocks ahead of research analyst reports which contained ratings changes.

According to the SEC order, Bolan was a research analyst at Wells Fargo Securities, LLC (Wells Fargo) and provided Ruggieri, a former trader at Wells Fargo, with advance notice of forthcoming rating changes. This advanced information allegedly led to Ruggieri trading ahead of the ratings changes; short selling stock ahead of a downgrade and buying stock ahead of upgrades. Ruggieri allegedly generated over $117,000 in gross profits for Wells Fargo and was terminated from Wells Fargo after compliance questioned him about communications involving Bolan. Bolan resigned from Wells Fargo after being questioned by compliance personnel. The SEC’s order, instituting a litigation proceeding, charged Bolan and Ruggieri with violating Sections 17(a) and 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5. The administrative proceeding will determine what, if any, relief is in the public interest, including disgorgement of ill-gotten gains, prejudgment interest, monetary penalties and other remedial measures.

Illegal insider trading is the act of buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about a company. Insider trading violations may also include “tipping” such information; trading by the person tipped – the “tippee,” and trading by those who misappropriate such information. Section 10(b) of the Securities and Exchange Act of 1934 makes it unlawful for any person to “use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the [SEC] may prescribe.” To implement Section 10(b), the SEC adopted Rule 10b-5, which makes it unlawful to engage in fraud or misrepresentation in connection with the purchase or sale of a security.

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The Securities and Exchange Commission (SEC) has charged Wells Fargo Advisors with failing to maintain adequate controls in order to prevent one of its employees from using confidential customer information to engage in insider trading. Additionally, the SEC charged Wells Fargo Advisors with producing an altered document in a compliance review of the broker’s trading activities. This case, in which Wells Fargo has agreed to the monetary penalty of $5 million, is the first time the SEC has charged a brokerage firm for its failure to protect a customer’s confidential information, an important ruling at a time when many peoples’ personal information is reportedly being compromised due to computer hacking.

According to the SEC’s order, a Wells Fargo broker received confidential information from a customer that Burger King was being acquired by private equity firm 3G Capital Partners. The broker, Waldyr Da Silva Prado Neto (Prado), then used that confidential information to enact trades ahead of the public announcement. The SEC has also charged Prado with insider trading, freezing his assets to prevent any transfers of the ill-gotten profits, alleged to be $175,000.

The SEC’s order goes on to state that multiple groups responsible for compliance or supervision at Wells Fargo were told of the broker’s misuse of customer information, but failed to act. According to Andrew J. Ceresney, Director of the SEC’s Enforcement Division, “When investors entrust private information to their stockbrokers or investment advisors, they have the right to expect that it will not be exploited.” Wells Fargo admitted to the SEC’s findings and agreed to pay the $5 million penalty.

Section 15(g) of the Securities Exchange Act of 1934 and Section 204A of the Investment Advisers Act of 1940 require broker-dealers and investments advisers to establish, maintain, and enforce policies and procedures reasonably designed to prevent the misuse of material nonpublic information. Brokerage firms like Wells Fargo Advisors have a legal duty to protect their customers’ confidential information and to supervise their brokers to ensure compliance and prevent violations of the rules and regulations of the securities industry.

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