November 30, 2021

SEC announces settlement with attorney accused of insider trading

On November 19, 2021, the Securities and Exchange Commission announced a settlement that was reached with attorney William E. Gericke in order to resolve insider trading allegations for securities that he allegedly purchased based on material nonpublic information obtained during a conflicts check that he ran while formerly employed by a large international law firm.  

According to the SEC Order, Gericke was acting in his capacity as conflicts counsel in October of 2019 when he learned of a potential merger involving firm client Liberty Property Trust (LPT), a Pennsylvania-based real estate investment trust (REIT), and another REIT Prologis, Inc., while handling a “confidential” conflicts check for a firm partner.  Even though Gericke knew the information obtained was material nonpublic information, he purchased 1,000 shares of LPT stock in advance of the public announcement regarding the merger – a purchase he also chose not to share with the firm at the time.  When the merger was publicly announced, the stock price increased by 13.7 percent enabling Gericke to sell his entire position in LPT for a profit of approximately $10,000.  

Under the terms of settlement, without admitting or denying the SEC’s findings, Gericke agreed to cease and desist from committing violations of the anti-fraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and was barred from appearing and practicing before the SEC as an attorney. Gericke also agreed to pay the SEC a $20,004.40 civil penalty under the settlement.

SEC Press Release | SEC Order