On September 27, 2023, the Securities Exchange Commission announced that it charged three Southern California siblings – Marco Perez, Pedro Perez, and Olivia Durbin – with insider trading in connection with the purchase of General Finance Corporation (“GFN”) securities before United Rentals Inc. announced its intent to acquire the company in 2021. According to the complaint, Marco Perez was formerly an accounting manager with GFN, a specialty rental services company that, before its acquisition, was based in Pasadena, California. During the course of his employment, Marco Perez allegedly obtained material nonpublic information (“MNPI”) regarding the acquisition and began purchasing GFN securities in violation of the company’s insider trading policy and the fiduciary duties of trust and confidence he owed to GFN and its shareholders. As the acquisition progressed, he allegedly made additional securities purchases and encouraged his siblings, Pedro and Olivia, to do the same. Based on the tip, Pedro Perez and Durbin also purchased GFN securities. The SEC further alleges that Marco Perez opened a brokerage account in his mother’s name and, without her knowledge, used it to purchase GFN securities before the acquisition was announced. Following the acquisition’s announcement, GFN’s stock price increased by more than 56 percent and trading volume soared 19,000 percent. As a result, the defendants allegedly realized combined profits of nearly $660,000 after they sold or tendered their shares.
According to the SEC’s complaint, which was filed in the US District Court for the Central District of California, the defendants’ conduct violated Section 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. The SEC entered into settlements with each of the defendants. Without admitting or denying the SEC’s allegations, Marco Perez consented to a partial judgment that will, subject to the court’s approval, permanently enjoin him from engaging in the alleged securities violations, prohibit him from serving as an officer and director of a registered company for five years and, require him to pay disgorgement with prejudgment interest and a civil penalty in amounts to be determined by the court at a later date. Without admitting or denying the SEC’s allegations, Pedro Perez consented to a final judgment which will, subject to the court’s approval, permanently enjoin him from engaging in the alleged securities violations, prohibit him from serving as an officer and director of registered company for five years, and require him to pay approximately $140,000 in disgorgement with prejudgment interest, and pay a civil penalty of nearly $130,000. Without admitting or denying the SEC’s allegations, Durbin also consented to the entry of a final judgment. She agreed to be permanently enjoined from engaging in the alleged securities violations and was ordered to pay nearly $40,000 in disgorgement with prejudgment interest and pay a civil penalty of more than $30,000, pending the court’s approval.
The US Attorney’s Office for the Central District of California announced that parallel criminal charges were filed against Marco Perez for his role in the insider trading and tipping scheme, which reportedly enabled him to personally generate $500,000 in illegal profits. According to the USAO, Perez has agreed to plead guilty to securities fraud pursuant to a plea agreement reached with federal prosecutors.
SEC Press Release | SEC Complaint | Proposed Judgment – Marco Perez| Proposed Final Judgment – Pedro Perez | Proposed Final judgment – Olivia Perez Durbin | USAO Central District of CA Press Release | Information | Plea Agreement