On October 15, 2024, the Securities and Exchange Commission charged Matthew Groom with insider trading in connection with the improper sale of Spero Therapeutics Inc. securities. According to the SEC’s complaint, Groom worked as an information technology consultant to Spero, a biopharmaceutical company based in Massachusetts, when the improper trades were made. In March 2022, Groom was reportedly subject to a confidentiality agreement with the company when he allegedly obtained material nonpublic information regarding Spero’s plan to suspend commercialization efforts for its lead product candidate, Tebipenem, which would result in a possible work force reduction. According to the SEC, Groom placed an order to sell all of his Spero shares within minutes of obtaining the MNPI. In May 2022, Spero publicly announced its plan to abandon support for its Tebipenem drug application and reduce its work force by approximately 75 percent. The announcement caused Spero’s stock price to fall by approximately 64 percent, allegedly enabling Groom to avoid approximately $13,000 in losses.
In the complaint, which was filed in the U.S. District Court for the District of Massachusetts, the SEC charged Groom with violating Section 17 (a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Groom reached a settlement with the SEC in which he consented to the entry of a judgment against him without admitting or denying the SEC’s findings. He also agreed to be permanently enjoined from future securities violations and was ordered to pay disgorgement of approximately $13,000, more than $2,000 in prejudgment interest, and a civil penalty of nearly $13,000. The judgment, which is subject to court approval, also imposed a five-year officer-and-director bar on Groom.