November 30, 2021

SEC settles with New Jersey mother and son charged with insider trading

On November 23, 2021,  the US Securities and Exchange Commission announced a settlement that it reached with a New Jersey mother and son, Carol E. Cohen and Austin Rotter, to resolve insider trading allegations related to Cohen’s purchase of common stock in The Trade Disk, Inc. (TTD), a global technology company specializing digital advertising campaigns, ahead of the public release of the company’s second-quarter earnings report. 

According to the SEC complaint, Rotter, who worked for a public relations firm that was retained by TTD from 2017 to 2019, obtained material nonpublic information (MNPI) related to an upcoming announcement by TTD regarding a positive Q2 2018 earnings report.  Rotter allegedly breached his duty of confidentiality to his employer by sharing information related to the positive earnings report with Cohen before it was announced publicly.  Based on this MNPI, Cohen, a retired school teacher, allegedly purchased $86,000 worth of TTD stock just days before the report was publicized, and after the earnings report was released, TTD’s stock increased by more than 37 percent enabling Cohen to realize $45,646.03 in illegal profits.

The SEC complaint, filed in US District Court for the Southern District of New York, charged Cohen and Rotter with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.  Both defendants consented to the entry of final judgments against them without admitting or denying the allegations in the complaint and agreed to be permanently restrained and enjoined from further violations of the Exchange Act.  Cohen also agreed to pay a civil penalty totaling $91,292.06, while Rotter agreed to pay a $45,646.03 civil penalty.

SEC Press Release | SEC Complaint | Final Judgment – Cohen | Final Judgment – Rotter