February 25, 2020

SEC settlement with manager who self-reported insider trading

On February 24, 2020 the US Securities and Exchange Commission accepted a settlement offer from Charles F. Kerwin for allegations related to insider trading.  In early 2019, Kerwin learned during the course of his employment with a networking technology company about a potential acquisition of a communications technology company.  Kerwin participated in his employer’s trainings on insider trading and allegedly knew that he was not allowed to initiate trades based on confidential information obtained through his employment.  He also participated in meetings related to the due diligence investigations into the company to be acquired.  However, between July 2 and July 5, 2019, he made a series of stock purchases linked to the communications company before the acquisition was made public.  When the acquisition was announced, the stock increased 35% resulting in unlawful profits of $94,860.55.  Two days after the public announcement, Kerwin voluntarily reported his securities purchase to the SEC and provided all information requested by SEC staff.  Because of Kerwin’s full and voluntary cooperation, the SEC accepted his settlement offer and ordered him to cease and desist from any violations pursuant to Section 21C of the Securities Exchange Act of 1934  and any future violations of Section 10 (b) of the Exchange Act and Rule 10b-5.  He must also pay disgorgement of $94,860.55 as well as a civil penalty of $47,430 to the SEC pursuant to Section 21A of the Exchange Act. 

SEC Cease and Desist Order