SEC Files Settled Insider Trading Charges Against Former Trader Eric Rogers
The Securities and Exchange Commission recently filed a settled civil enforcement action against Eric Rogers, a former proprietary trader at the now-defunct registered broker-dealer Spectrum Trading, LLC, charging Rogers with using inside information to trade ahead of the September 28, 2007 announced acquisition of 3Com Corp.
In its complaint, the SEC alleges that Arthur Cutillo and Brien Santarlas, two former attorneys at the law firm Ropes & Gray LLP, misappropriated from their law firm material, nonpublic information concerning upcoming corporate acquisitions or bids, including the 2007 announced acquisition of 3Com. As alleged in the complaint, Cutillo tipped the inside information, through another attorney, to Zvi Goffer, a proprietary trader at the broker-dealer Schottenfeld Group LLC, in exchange for kickbacks. The SEC alleges that Goffer tipped the inside information to, among others, his brother Emanuel, who worked with Rogers at Spectrum. The complaint alleges that Emanuel Goffer tipped the information to Rogers, who, based on that information, purchased 3Com securities in a proprietary account at Spectrum, resulting in total illicit profits of approximately $207,000. Rogers’ personal share in the trading profits was $103,500.
To settle the SEC’s charges, Rogers consented to the entry of a final judgment that: (i) permanently enjoins him from violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; and (ii) orders disgorgement of $103,500, plus prejudgment interest of $24,872. Those payments obligations will be waived, and no civil penalty will be imposed, in light of Rogers’ financial condition. In addition, Rogers consented to the entry of an SEC Order barring him from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, and barring him from participating in any offering of a penny stock. [SEC v. Eric D. Rogers, Civil Action No. 13-CV-0374 (S.D.N.Y.)]
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