SEC Charges Joseph Tocci with Insider Trading

SEC v. Joseph M. Tocci, Case No. 1:13-cv-11924 (D. Mass.).  On August 12, 2013, the SEC announced insider trading charges against Joseph M. Tocci.  The SEC alleges that Tocci traded on the basis of confidential information he obtained when he was the assistant treasurer of American Superconductor.  According to the SEC, he bought option contracts hoping the company’s stock price would fall after some negative news was publicly released.  The SEC alleges that Tocci learned that the company’s largest customer had refused to accept shipments scheduled for delivery by the close of the company’s fiscal year and was delinquent in paying for earlier shipments.  Tocci was told by the company’s CFO to keep the information confidential.  Tocci then bought put option contracts.  After the company released the negative news, its stock price dropped and Tocci made $82,439 in profits.  The SEC settled with Tocci who agreed to entry of a judgment enjoining him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.  He also agreed to pay disgorgement of $82,439, prejudgment interest of $6,109, and a civil monetary penalty of $82,439.  Tocci also agreed to plead guilty in a parallel criminal case brought by the U.S. Attorney’s Office for the District of Massachusetts in connection with the same conduct.

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