SEC charges former tech executive and his brother-in-law with insider trading

On December 11, 2020, the US Securities and Exchange Commission announced insider trading charges filed against William Wright, former corporate controller of CED, Inc., and his brother-in-law Christopher Clark, related to securities trades made by Clark and Clark's son in advance of CEB's merger with Gartner Inc. in 2017.  

Between November 2016 and January 2017, CEB, a global technology company, and Gartner, an information technology research and advisory company, commenced merger discussions. At the time, Wright obtained material, nonpublic information regarding the merger as CEB’s corporate controller.  According to the complaint, Wright repeatedly shared confidential non-public information with Clark as merger discussions increased, and in early December 2017, Clark began purchasing highly-speculative, out-of-the-money, short-term CEB call options, based on the information received from Wright, and instructed his son to do the same.  The SEC reports that the options purchases were so speculative, that in four of the five purchases made by duo, Clark and his son were the only purchasers of those particular call options, and their purchases became more aggressive in the days leading up the merger.

On January 5, 2017, Gartner officially announced that Gartner would acquire CEB, and CEB stock increased by 21% in one day.  According to the complaint, Clark began selling his call options on the day of the announcement, while Clark’s son sold all of this options that day.  In total, Clark allegedly made $243,190 in illicit profits, and his son made $53,050.

The SEC has charged both Wright and Clark with violations section 10(b) of the Securities and Exchange Act of 1934, and Rule 10b-5 thereunder, seeking permanent injunction and civil penalties, as well as an order that Wright be prohibited from acting as an officer or director of a public company.

SEC Press Release | SEC Complaint

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