June 21, 2020

CPA reaches settlement with SEC for insider trading

On June 5, 2020, the US Securities and Exchange Commission announced that a settlement was reached with certified public accountant, Jana Faith Kiena, for allegations of insider trading while she worked as a contract employee for biotech firm Illumina.  The order states that in June of 2019, Kiena learned during a company meeting, that the firm was expecting disappointing revenues for its second quarter.  Based on this material nonpublic information, Kiena purchased 50 short-term Illumina option contracts on two separate occasions according to the order.  The order reports that in July of 2019, Illumina publically disclosed that its second quarter revenues would be lower than expected, causing the stock price to drop 16 percent.  Kiena allegedly sold the 50 option contracts the day after the public disclosure, and made approximately $250,000 in unlawful profits.  The order states that in August of 2019, less than a month after selling the securities, Kiena self-reported her trades to the SEC and cooperated with the SEC’s investigation.

According to the order, Kiena’s conduct violated Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder.  Under the settlement, Kiena must cease and desist from committing or causing future violations of these provisions, is denied the privilege to appear or practice before the SEC as an accountant, and must pay disgorgement of all unlawful profits totaling $249,227.92, and a civil penalty of $124,613.96.  The order also states that Kiena can request a reinstatement to resume practice before the SEC after two years, and acknowledges that Kiena’s civil penalty was no more than $124,613.63 because of her cooperation with the SEC’s investigation.

SEC Press Release | SEC Order