May 15, 2023

SEC settles with Wisconsin resident to resolve insider trading allegations

On May 12, 2023, the Securities and Exchange Commission announced that it reached a settlement with Wisconsin resident Todd Dobberfuhl to resolve insider trading charges related to the purchase of securities ahead of a June 25, 2020 announcement that biotech company Vaxart and Attwill Medical Solution Steriflow, LP had signed a Memorandum of Understanding (“MOU”) enabling Vaxart to use Atwill’s production facilities for the large-scale manufacture of an oral COVID-19 vaccine that Vaxart was developing.  The SEC reports that Dobberfuhl, who served as Atwill’s controller from 2017 to 2020, obtained material nonpublic information (“MNPI”) regarding the MOU during the course of his employment.  In violation of a duty of trust and confidence to his employer, on June 18, 2020, Dobberfuhl allegedly purchased Vaxart stock based upon and while in possession of this MNPI.  After information regarding the MOU was announced publicly, Vaxart’s stock price increased by 96 percent, and Dobberfuhl reportedly realized more than $72,000 in profits from the unlawful trades.

The SEC charged Dobberfuhl for violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.  Under the terms of settlement and without admitting or denying the SEC’s claims, Dobberfuhl agreed to cease-and-desist from further securities violations and agreed to pay a civil penalty of approximately $72,000, disgorgement of approximately $72,000, and prejudgment interest of approximately $7,000.

SEC Press Release | SEC Order