Following the short holiday week, below are notable developments in SEC enforcement activity for the week of Dec. 24-28.
Insider Trading: One More Charged for IBM-SPSS Merger Scheme
The SEC has charged another broker for taking part in an insider trading scheme connected to IBM’s acquisition of SPSS. Trent Martin learned of the impending merger from an attorney friend working on the deal, who confided in Martin for “moral support, reassurance, and advice,” according to the SEC complaint. Martin allegedly purchased SPSS shares the first day he learned of the deal, then tipped his roommate, Thomas Conradt, who was charged earlier this month.
Read the SEC complaint here.
Enforcement Chief Kuzami Rumored to Leave
Last week, both Bloomberg and the Wall Street Journal reported that SEC Enforcement Division director Robert Khuzami was stepping down from his post. No official announcement has been made, but if true this would be the third director to leave in the last month (with Meredith Cross, Division of Corporation Finance, and General Counsel Mark Cahn), not to mention Chairman Mary Schapiro’s retirement.
Insider Trading: Rajaratnam Settles Civil Charges for $1.5 Million
Raj Rajaratnam, former CEO of Galleon Group LLC, was convicted of criminal charges in May 2011 of operating a massive insider trading scheme and sentenced to 11 years in prison. In addition, the SEC filed civil charges of insider trading. Rajaratnam agreed to pay $1.5 million to settle the civil charges.