The Securities and Exchange Commission recently announced that it reached a $1.36 million settlement with corporate officer Alfred V. Tobia Jr. and his sister-in-law, Elizabeth Lee, to resolve insider trading allegations related to the purchase of securities of Spok Holdings Inc. and PFSWeb Inc. based on material nonpublic information. Tobia, who formerly served as the president and chief investment officer of a public company and as a member of another company’s board, allegedly shared MNPI with Lee who generated more than $428,000 in total profits from the illegal trades.
According to the SEC’s complaint, in the Summer of 2021, Tobia, as president and CIO of an unnamed public company, obtained MNPI regarding a recent offer by his company to acquire all of the outstanding shares of Spok Holdings stock. Tobia allegedly breached a fiduciary duty to his unnamed employer by sharing this MNPI with Lee who purportedly purchased Spok stock based on the tip. After Tobia’s employer announced its offer to purchase the outstanding shares, Spok’s stock increased by approximately 26 percent enabling Lee to allegedly obtain more than $262,000 in illicit profits. According to the SEC, while serving as a member of the board of another public company, Tobias obtained MNPI concerning PFSWeb’s plan to sell a business unit known as LiveArea. He allegedly shared the MNPI with Lee who purchased PFSWeb stock based on the tip. When the LiveArea transaction was announced publicly, Lee sold her PFSWeb shares and allegedly realized more than $166,000 in illegal profits.
The SEC filed a complaint charging Tobia and Lee with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In final judgments filed on January 16, 2025 in the Southern District of New York, Tobia and Lee agreed to be enjoined from committing future securities violations and agreed to pay civil penalties without admitting or denying the SEC’s allegations. Lee specifically agreed to pay a $576,955 civil penalty, while Tobia agreed to pay a civil penalty of $785,020. Tobia was additionally barred from serving as an officer or director of a public company for a period of five years.
SEC Litigation Release | Final Judgment – Tobia | Final Judgment – Lee | Complaint