On June 25, 2024, the Securities Exchange Commission announced that it reached a settlement with Robert Schettino, the former Controller of Napco Security Technologies Inc. (“NAPCO”), to resolve insider trading charges against him. Schettino was charged by the SEC for securities trades made in advance of the company’s quarterly earnings announcement in February 2020. According to the SEC’s cease-and-desist order, in December of 2019 through his role as Controller, Schettino allegedly obtained material nonpublic information (“MNPI”) regarding a decline in company revenues in its second fiscal quarter while overseeing the finalization of NAPCO’s accounting records for the quarter and the preparation of the company’s financial reports. Schettino allegedly sold all 20,975 shares of NAPCO stock in his brokerage account approximately two weeks before the company was scheduled to make its quarterly earnings announcement. Following the announcement, NAPCO’s stock decreased by more than 22 percent allegedly enabling Schettino to avoid approximately $198,000 in losses.
According to the SEC, Schettino’s trades violated a duty of trust and confidence and a duty of confidentiality that he owed to NAPCO as its Controller. As a result, the SEC charged him with violating section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. According to the order, Schettino agreed to cease-and-desist from future securities violations without admitting or denying the SEC’s findings. He also agreed to disgorge approximately $198,000, pay more than $38,000 in prejudgment interest, and pay a civil penalty of more than $198,000. The SEC also barred Schettino from serving as an officer or director of a publicly traded company and from appearing or practicing before the Commission as an accountant.
SEC Press Release | Cease-and-Desist Order