The US Attorney’s Office in Chicago filed criminal charges against Jason Napodano, a former managing director of Zacks Investment Research, for securities fraud for trading on material, non-public information he obtained while preparing equity research reports related to certain small capitalized companies (i.e., penny stocks). The Securities and Exchange Commission also brought and settled civil charges against Mr. Napodano for the same conduct, as well as for misleading investors that he wasn’t trading or holding positions in the relevant companies when, in fact, he was. To resolve this matter, Mr. Napodano agreed never to trade penny stocks, disgorge all his trading profits and pay a fine of approximately US $144,000. Two other investment bankers were charged and settled with the SEC for related conduct – Bilal Basrai and Bryce Stirton – while Mr. Basrai was also named in the criminal complaint. A broker-dealer that shares the same chief executive officer as ZIR – LBMZ Securities, Inc. – was also named in the SEC complaint for failing to have adequate written procedures to monitor the use of non-public information by its employees. LBMZ resolved this complaint by agreeing to pay a fine of US $240,000.