The Securities and Exchange Commission (SEC) has filed insider trading charges against nine defendants and three relief defendants.  The Commission named Matthew Devlin, former registered representative for Lehman Brothers, Inc., as the head of this scandal.  Between March 2004 and July 2008, Devlin allegedly tipped at least four of his clients and friends with inside information, yielding over $4.8 million in profits.  According to the complaint, Devlin’s clients then tipped off other people as well, who also traded in the securities. (more…)

The U.S. Securities and Exchange Commission (SEC) has charged Dallas Mavericks owner Mark Cuban with insider trading.  Cuban has responded:

I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so. (more…)

In the wake of the continuing financial disaster another reminder that a big-name is no guarantee of integrity is probably unnecessary.  We have been warning the investing public of that fact for the past year.  But, a recent enforcement action by the U.S. Securities and Exchange Commission (”SEC”), gives us more evidence to support the conclusion.  The SEC has settled insider trading charges against seven individuals, including two who were professionals working for UBS and Morgan Stanley.  Read more about the case here. (more…)

The SEC has charged Beaufort, South Carolina Mayor William J. Rauch with insider trading.  According to the Commission: (more…)

The SEC’s press release about a recent insider trading case reads in part as follows:

The Securities and Exchange Commission alleged in an insider trading case filed today that from at least the summer of 2006 through the fall of 2007, a partner at a Big Four accounting firm tipped his friend concerning the identities of at least seven different acquisition targets of clients who sought valuation services from the partner’s firm in connection with those acquisitions. (more…)

One of the most common misunderstandings about the law of insider trading is that only company insiders or those who get a tip from them can be liable for insider trading.  The law is more complicated than that.  As it should, it reaches every scenario in which someone trades based on material inside information.   A recent case illustrates the point. (more…)

The SEC has made hedge fund fraud and insider trading cases enforcement priorities.  They have been able to kill two birds with one stone with a recent case alleging insider trading by a hedge fund manager.  Read the SEC’s press release.

The Securities and Exchange Commission (SEC) has charged three south Florida physicians - Dr. Zachariah P. Zachariah, Dr. Mammen P. Zachariah, and Dr. Sheldon Nassberg - with reaping more than $500,000 through illegal insider trading.  Specifically, the SEC claims that Dr. Z. Zachariah was a member of the Board of Directors of IVAX, Inc. when he learned of an offer to acquire that company.  “Within minutes” of learning that information, according to the SEC, Dr. Z. Zachariah began buying IVAX stock (he ultimately bought 35,000 shares at a cost of approximately $730,000).  (more…)

I investigated many insider trading cases while at the SEC.  They can be hard to prove.  Sometimes, though, the violator makes it almost too easy.  If an executive officer of a company trades in his own company’s stock after learning material information, we used to say that it was time for him to pay a “Stupidity Tax.”  Who in that position would believe for a moment that his trades would go unnoticed?    (more…)

The SEC has charged Paul Berliner with malicious gossip.  Specifically, the SEC claims that Berliner, a Wall Street trader, sent text messages to other traders saying (falsely) that the Blackstone Group board was meeting to consider changes to its agreement to acquire Alliance Data Systems Corp (ADS) for $81.75 per share.  Berliner spread the rumor that Blackstone was going to propose a lower purchase price of $70 per share.  (more…)