On December 5, 2024, the Securities and Exchange Commission announced that it obtained final judgments against Jordan Qsar, Austin Bernard and Grant Witherspoon, three former minor league baseball players who were charged with insider trading. According to the SEC’s complaint, they purchased securities of Del Taco Restaurants in the Fall of 2021 before an announcement, in December 2021, regarding Jack in the Box, Inc.’s planned acquisition of the company.
In the complaint, which the SEC filed in the Southern District of California in March 2024, Qsar was accused of obtaining material nonpublic information regarding the Del Taco’s acquisition from a close friend and former teammate who was working for Jack in the Box on the acquisition. Qsar allegedly misappropriated the MNPI by purchasing call options for Del Taco stock. He also allegedly shared the MNPI with Bernard and Witherspoon who purportedly purchased Del Taco stock based on the tip. The SEC alleges that Qsar made approximately $56,500 in profits from the unlawful trades, while Bernard and Witherspoon allegedly obtained about $64,700 and $42,800 in profits, respectively.
The SEC reported that the three co-defendants consented to final judgments, which enjoined them from violating Section 10 (b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In separate judgments, they each agreed to pay disgorgement, representing the net profits from their alleged misconduct, as well as prejudgment interest and civil monetary penalties. The SEC reported that Qsar was ordered to pay disgorgement of $56,470, $9,986 in prejudgment interest and a $63,194 civil penalty. Bernard was ordered to pay $64,693 in disgorgement, $11,440 in prejudgment interest, and a $48,143 civil penalty. Witherspoon was ordered to pay $42,768 in disgorgement, $7,563 in prejudgment interest, and a civil penalty of $48,143.
In March 2024, the U.S. Attorney’s Office for the Southern District of California filed parallel criminal charges against Qsar, Bernard and Witherspoon in connection with the illegal securities trades. The criminal case against the three co-defendants continues.
In March 2024, the SEC also charged a fourth co-defendant, Chase Lambert, for allegedly purchasing Del Taco securities based on a tip received Qsar. No criminal charges were filed against Lambert, who entered into a settlement with the SEC in May 2024 to resolve the insider trading charges against him. In the settlement, Lambert consented to entry of a final judgment without admitting or denying the SEC’s allegations against him. He also agreed to be enjoined from future securities violations and agreed to pay disgorgement of $25,080, pay $3,473 in prejudgment interest, and pay a $29,775 civil penalty.
SEC Press Release | SEC Complaint | Final Judgment – Qsar | Final Judgment – Witherspoon | Final Judgment- Bernard | Criminal Indictment | Final Judgment – Lambert