August 9, 2021

Pizza accountant charged with insider trading

The US Securities and Exchange Commission has settled insider trading charges against Leonard R. Barr, who worked in the accounting department of a publicly traded pizza chain between 1996 and 2020.   According to the complaint, filed on August 6, 2021 in the US District Court for the Eastern District of Michigan, Barr prepared and reviewed confidential data related to the financial performance of his employer, and part of his job involved attesting to the veracity and completeness of the data used to prepare the company’s quarterly and annual filings with the SEC.  Despite his obligation to maintain this material non-public information confidential prior to the release of the filings, on several occasions within days of receiving drafts of the company’s financial results, Barr purchased call options for stock in the company, exercising the options when the share price rose, and profiting by $34,180.

The complaint alleges that Barr’s conduct violated Section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. § 78j (b)) and Rule 10b-5 thereunder (17 C.F.R. § 240.10b-5).   Barr has consented to the entry of an order permanently enjoining him from violating these provisions, and requiring him to pay a civil penalty of $68,360.  The settlement is subject to approval by the court.

SEC press release | Complaint