On August 23, 2023, the Securities and Exchange Commission charged Romero Cabral da Costa Neto, a visiting attorney from Brazil, with insider trading for engaging in unlawful securities trades based on material, nonpublic information (“MNPI”) obtained during his one-year employment with an unnamed global law firm. According to the SEC’s complaint, Costa, who began working for the firm in September 2022, purchased more than 10,000 shares of CTI BioPharma Corp. (“CTIC”) based on MNPI related to the firm’s work on its impending merger with biopharmaceutical company Swedish Orphan Biovitrum AB. The shares were allegedly purchased by Costa on the day before the deal was publicly announced, in breach of his duty to keep firm confidences and not use client information for his own benefit. He allegedly sold the shares in violation of the firm’s policies, including its insider trading policy, and realized a profit of more than $42,000. The SEC further alleged that Costa improperly accessed other firm clients’ files with no legitimate business purpose and engaged in unlawful trades in advance of public announcements regarding those companies.
In the complaint, which was filed by the SEC in the US District Court for the District of Columbia, Costa is charged with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC is also seeking a permanent injunction on the charged securities violation and an order requesting the payment of a civil penalty and disgorgement of his ill-gotten gains with prejudgment interest.
On the same day, a parallel criminal case for insider trading was filed by the US Attorney’s Office for the District of Columbia following Costa’s arrest on August 22, 2023 by FBI agents with the Washington Field Office.