In another recent example of enforcement action against insider dealing across the pond, the Securities and Exchange Commission (SEC) has brought charges against four California residents.
The charges relate to trading activity in stock options for a company named Ross Stores, which was allegedly based on non-public information about monthly sales results leaked by one of the retailer’s employees.
The SEC alleges that Saleem Khan was routinely tipped by his friend Roshanlal Chaganlal, who was a director in the finance department at Ross headquarters. Khan used this confidential information to illegally trade on more than 40 occasions ahead of the company’s public release of financial results.
Besides trading in his own brokerage account, Khan traded in his brother-in-law’s account as well as an account belonging to another acquaintance. Khan also tipped two work colleagues so they too could trade in Ross stock options based on the non-public information.
The insider trading apparently resulted in collective profits of more than $12 million.
The SEC has charged Saleem Khan, Chaganlal and two other defendants with violating the antifraud provisions of the federal securities laws. The SEC is seeking permanent injunctive relief, disgorgement of illicit profits plus interest, and financial penalties. It is also seeking an officer-and-director bar against Chaganlal.
“Khan and Chaganlal took advantage of confidential company data to systematically trade in Ross securities and reap millions of dollars in profits,” said Jina L. Choi, director of the SEC’s San Francisco Regional Office. “Even when insider traders try to conceal their profits and kickbacks by using other accounts and intermediaries, we’re committed to piecing together these widespread schemes and catching the perpetrators.”
Insider dealing investigations are highly complex and can have serious implications for the parties involved. Specialist legal advice is essential.
Contact Lewis Nedas’ Specialist Lawyers in London
For specialist legal advice please contact our solicitors on 020 7387 2032 or complete our online enquiry form here.
This blog post is intended as a news item only – no connection between Lewis Nedas and the parties concerned is intended or implied.