The SEC alleges that the former employee, who worked in the
finance department at Abaxis Inc., regularly provided material nonpublic information
to her brother, whose insider trading in advance of the company's quarterly
earnings announcements generated $144,910 in illicit profits. The brother, who
was charged by the SEC last year,
also passed confidential information to clients of his equity research firm
Insight Research, including hedge fund managers.
To settle
the SEC's charges, the former employee has agreed to pay $144,910 and be barred
from serving as an officer or director of a public company for five years.
"When
corporate insiders leak confidential information to a select few, the integrity
of our markets is undermined," said Sanjay Wadhwa, Senior Associate
Director of the SEC's New York Regional Office. "Abaxis entrusted [the former
employee] with market-moving information, and she violated that trust to
financially benefit her family."
The SEC's
charges stem from its ongoing investigations into expert networks that have
uncovered widespread insider trading at several hedge funds and other
investment advisory firms. The investigations have so far resulted in
enforcement actions against 40 entities or individuals who have reaped more
than $430 million in alleged insider trading gains.
For more information, visit SEC Charges Former Medical Device Company Employee for Illegally Tipping Brother with Quarterly Earnings Data.
