On January 11, 2022, the US Securities and Exchange Commission announced the entry of a final judgment in the US District Court for the Eastern District of New York against Douglas Roth, resolving insider trading allegations against the former Chief Financial Officer of Aceto Corporation, a generic pharmaceuticals company.
According to the SEC Complaint, in early 2018 Aceto’s sales and earnings were declining and, as CFO at the time, Roth obtained material, non-public information related to Aceto’s financial condition before he retired on March 31, 2018, which also happened to be the last day of Aceto’s third fiscal quarter. After obtaining the material, non-public financial information and just days after retiring, Roth sold all of the Aceto shares that had vested upon his retirement, avoiding more than $305,000 in losses, according to the complaint.
Roth consented to the entry of final judgment against him, admitting to violating Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder. As part of the final judgment, Roth is permanently enjoined from further violations of the antifraud provisions of the Exchange Act, and is banned from serving as an officer or director of a public company. On November 10, 2021, the SEC also suspended Roth from appearing or practicing before the SEC pursuant to Rule 102(e)(2) of the SEC’s Rules of Practice.
In November 2020, Roth pleaded guilty to insider trading in a parallel criminal action filed by the US Attorney’s Office for the Eastern District of NY, and in July 2021 was sentenced to six months in prison followed by six months of home incarceration, and one year of supervised release, and ordered to pay a $150,000 fine and forfeit more than $147,000.
SEC Press Release | Judgment | DOJ Press Release | Criminal Information