The U.S. Department of Justice recently announced that Idaho executive Michael Smith pleaded guilty to one count of securities fraud to resolve allegations that he engaged in insider trading in connection with the purchase of securities of an unnamed company, whose shares were publicly traded on NASDAQ, based on material nonpublic information. According to federal prosecutors, Smith obtained MNPI regarding the impending acquisition of his employer (“Company-1”) by another company while serving as the President and Chief Operating Officer of Company-1. On July 26, 2024, while in possession of this MNPI, Smith allegedly purchased more than 17,000 shares of Company-1 stock using a brokerage account belonging to Individual-A, an unidentified close personal friend of Smith’s whom he volunteered to help with stock purchases. Company-1’s stock price increased by 48 percent after the planned acquisition was announced publicly on August 7, 2024. On the day following the announcement, Smith allegedly sold all of Individual-A’s stock in Company-1 and generated a profit of $145,754.69. According to federal prosecutors, Smith’s securities purchases, which were executed for the financial benefit of Individual-A, violated Company-1’s insider trading policy and a fiduciary duty that Smith owed to Company-1 and its shareholders.
Smith is currently scheduled to be sentenced in the U.S. District Court for the District of Idaho on February 5, 2026.
DOJ Press Release | Amended Rule 11 Plea Agreement | Filing re Criminal Proceeding