October 8, 2023

Former financial controller settles with SEC to resolve insider trading charges

The Securities and Exchange Commission recently charged Jonathan Ferrie, a former financial controller for health insurance company Cigna Group, with insider trading.  According to court documents, Ferrie traded in Cigna securities while in possession of material nonpublic information obtained during the course of his employment as a financial controller.  In particular, Ferrie engaged in stock options trades during the second quarter of 2021 just after he learned that the company’s financial performance was below expectations for his division due to unexpected increases in health care costs related to the Covid-19 pandemic.  These trades allegedly violated Cigna’s written insider trading policy, which expressly forbade Cigna employees from trading in options on Cigna stock.  On the morning of Cigna’s public announcement, Ferrie allegedly sold his options and realized a profit of just over $16,000, a 236 percent return on his investment.

The SEC’s complaint, which was filed on September 18, 2023 in the US District Court for the District of Connecticut, charged Ferrie with violating section 10(b) of the Securities Exchange of 1934 and Rule 10b-5.  On September 27, 2023, the court approved Ferrie’s settlement with the SEC in which he agreed, without admitting or denying the SEC’s allegations, to be permanently enjoined from future antifraud violations.  Ferrie also agreed to pay approximately $16,000 in disgorgement, almost $1,500 in prejudgment interest, and a civil money penalty of just over $16,000.  Ferrie also consented to be barred from acting as an officer or director of a public company for a period of three years.  On September 29, 2023, following an administrative proceeding, the SEC also suspended Ferrie from appearing or practicing before the Commission as an accountant.  According to the order, Ferrie will be permitted to apply for reinstatement after a period of three years.

SEC Press Release | Final Judgment| SEC Order