Co-coaching your daughters’ basketball team with your brother-in-law and later profiting from buying stock in your brother-in-law’s company is not, in and of itself, insider trading. This seems fairly obvious. On Monday, December 13, 2021, U.S. District Judge Claude Hilton in northern Virginia agreed when – during trial – he found that the Securities and Exchange Commission (the “SEC”) did not present sufficient evidence that Christopher J. Clark’s trading activities related to his co-coach/brother-in-law’s company constituted illegal insider trading.1
Clark’s trading was flagged as suspicious because, as the SEC argued, his trades had “an improbable success rate.” The SEC took the position that Clark’s too-good-to-be-true trades, combined with the fact that Clark spent ample time with his brother-in-law and borrowed money to make the trades at issue, clearly pointed to insider trading. Instead of presenting testimony or other direct evidence, the SEC’s case largely hinged on its statistical surveillance tools’ identification of the trades as “highly suspicious.”
A corporate insider that provides material, non-public information to a family member or friend who then trades on the basis of that information commits insider trading in violation of Section 10(b) of the Securities and Exchange Act and SEC’s Rule 10b-5.2 A “tippee” like Clark can also be held liable for trading on material, non-public information if they knew, or should have known, that the information was given...
A Delaware County doctor has agreed to pay more than $1.6 million back after admitting to filing more than 27,000 fraudulent Medicaid claims. Dr. Patrick Muffley, 56, of Lewis Center, pleaded guilt...