October 3, 2019

Registered representative sanctioned by SEC after being found liable for insider trading

On September 23, 2019, the US Securities and Exchange Commission published a cease and desist order barring Raymond J. Pirrello, Jr. from association with any broker, dealer, investment advisor or municipal securities dealer, and from participating in penny stock offerings.  The sanctions follow a final judgment issued on September 9, 2019 in the US District Court for the Northern District of Georgia.  The SEC’s complaint alleged that between 2008 and 2016, Pirrello was a registered representative associated with a registered broker-dealer, and that he received material nonpublic information from one of his brokerage clients regarding three potential acquisitions, and tipped a friend about the acquisitions despite the duty not to disclose the information.  The friend purchased stock, and profited when the acquisitions were announced to the public.  Pirrello was tried in August 2019, and the Jury found him liable for insider trading, in violation of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 1-b-5 and 14e-3 thereunder. The district court judgment required the payment of disgorgement of $21,500 and a civil penalty of $107,000.

SEC order