Tuesday, December 23, 2014

Corporate Attorney Sells Stock, Settles Insider Trading Case

You would think a corporate attorney would know better. The SEC announced the settlement of an insider trading complaint against an attorney and his wife.

The SEC alleged that while serving as outside counsel to a pharmaceutical company, the attorney learned that the company was on the brink of announcing a significant decline in expected revenue due to an unanticipated drop in orders for its top-selling drug.  According to the SEC, he sold his entire investment within 48 hours of getting the nonpublic information from company officials who sought the disclosure advice of his law firm.  He tipped his wife, who also sold all of her shares.  The day after his wife sold her stock, the company issued a press release revealing the expectation of decreased sales of the drug and the consequent expectation of reduced revenue, and stock price fell more than 35 percent. 

The SEC claimed that the attorney and his wife did all of this to avoid losses of nearly $45,000.

They agreed to settle the case by paying $90,000, and attorney agreed to be suspended from practicing as an attorney before the SEC on behalf of any publicly traded company or other entity regulated by the agency.


For more information - SEC.gov | SEC Charges Corporate Attorney and Wife With Insider Trading on Client’s Confidential Information


The attorneys at Sallah Astarita & Cox include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including the defense of enforcement actions and representation of investors, financial professionals and investment firms, nationwide. For more information call 212-509-6544 or send an email.

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