Federal Jury Convicts Individual in Insider Trading Case (with Lofchie Comment)

The SEC announced that a federal jury in Massachusetts convicted an individual of criminal charges of conspiracy and securities fraud. The charges stemmed from his role in an insider trading ring that traded on information about American Superconductor Corporation. The SEC had instituted a securities fraud action on the same matter in July 2014.

According to the U.S. Attorney's Office for the District of Massachusetts, the individual learned of the information through a friend who provided him with material, non-public information concerning American Superconductor's quarterly earnings and other business activities, with the understanding that it would be kept confidential. Instead, the individual used e-mail and other means to provide the information to his golfing friends, who used the information subsequently to profit on the purchase and sale of American Superconductor stock and options.

Lofchie Comment: People who golf seem to be involved in a disproportionate share of insider trading cases. This raises a question: what is the incidence rate of mismarked cards?

See: SEC Litigation Release. See generally: Insider Trading Specialty Page (available to Cabinet subscribers only).