Securities Enforcement Blog

SEC v. John Femenia, et al., Case No. 3:12-cv-803 GCM (W.D. NC).  On December 5, 2012, the SEC announced insider trading charges against Wells Fargo investment Banker John W. Femenia and Aaron M. Wens, Matthew Musante, Anthony Musante, Shawn Hegedus, Danielle Laurenti, Roger A. Williams, Frank M. Burgess, Jr., James A. Hayes IV, and Kenneth M. Raby.  The SEC also obtained an order freezing the traders’ assets.  The SEC alleges that Femenia obtained inside information about several business deals involving Wells Fargo clients.  Continue reading →

SEC v. I. Joseph Massoud, Case No. 3:12-cv-01691 (D. Ct.).  On November 30, 2012, the SEC announced insider trading charges against I. Joseph Massoud.  The SEC alleges that Massoud traded ahead of the sale of Patriot Capital Funding based on nonpublic information.  Massoud directed his investment advisory firm, Compass Group, to execute a confidentiality agreement with Patriot Capital so it could participate in the bidding process for Patriot Capital’s sale.  After his firm was provided access to an “online dataroom” containing information about Patriot Capital as part of the bidding process, a Compass Group analyst accessed the dataroom and provided nonpublic information to Massoud.  Continue reading →

SEC v. Igor Cornelsen and Bainbridge Group, Inc., Case No. 12-civ-8712 (S.D.N.Y).  Previously, I wrote about the SEC’s Burger King Insider Trading Case against Waldyr Neto.  On November 30, 2012, the SEC announced charges against Igor Cornelsen and his firm Bainbridge Group for their role in the in the same insider trading scheme.  According to the SEC, Cornelsen was tipped by Neto about an impending Burger King deal.  After talking with Neto, Cornelsen began trading out Burger King call options the next day.  He had never previously traded Burger King securities.  Cornelsen and Bainbridge Group have settled with the SEC.  Without admitting or denying the allegations of the complaint, they consented to entry of a final judgment enjoining them against violations of Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder.  They have also agreed to jointly and severally pay $1,681,090 in disgorgement and $136,620.96 in prejudgment interest.  Cornelsen will also pay a $3,362,180 civil monetary penalty.

SEC v. Michael Van Gilder and Roger Parker, Case No. 12-cv-2839 (D. Colo.).  Previously, I wrote about the SEC’s insider trading case against Michael Van Guilder.  The SEC alleged Van Gilder traded on inside information in advance of Delta Petroleum Corporation’s public announcement that a private investment firm, Tracinda, had agreed to purchase a significant stake in Delta.  On November 28, 2012, the SEC announced the filing of an amended complaint charging Delta’s former CEO Roger Parker with being the source of the inside information.  The SEC alleges that Parker tipped Van Gilder and another friend with confidential information about the purchase even though he had a duty to keep the information confidential as Delta’s CEO.  The amended complaint charges Parker with violations of Section 10(b) of the Exchange Act and Rule 10b-5. The SEC seeks disgorgement, civil monetary penalties, injunctive relief and an order barring Parker from acting as an officer or director of a public company.