Nine Individuals Including an Ex-CISO, Investment Banker and Former FBI Trainee Charged with Insider Trading by SEC

The Securities and Exchange Commission yesterday filed insider trading charges against nine individuals in connection with three separate alleged schemes that together yielded more than $6.8 million in ill-gotten gains. Those charged include a former chief information security officer (CISO), an investment banker, and a former FBI trainee, all of whom allegedly shared confidential information with their friends, who then traded on that confidential information. Each of the three actions announced yesterday originated from the SEC Enforcement Division's Market Abuse Unit’s (MAU) Analysis and Detection Center, which uses data analysis tools to detect suspicious trading patterns.

The SEC's enforcement actions were filed in federal district court in Manhattan, and in each case the U.S. Attorney's Office for the Southern District of New York yesterday announced parallel criminal charges.

"If everyday investors think that the market is rigged at their expense in favor of insiders who abuse their positions, they are not going to invest their hard earned money in the markets," said Gurbir S. Grewal, Director of the SEC's Enforcement Division. "But as today's actions show, we stand ready to leverage all of our expertise and tools to root out misconduct and to hold bad actors accountable no matter the industry or profession. That's what's required to restore investor trust and confidence."

The SEC's complaints charge all nine defendants with violating the antifraud provisions of the securities laws and seek permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties. In all three cases, the SEC's investigation is ongoing.