The DOJ and SEC charged a credit ratings analyst with insider trading for allegedly tipping two of his friends about material nonpublic information. Both agencies also filed charges against the two friends who were allegedly involved in the insider trading scheme.
The DOJ and SEC Complaints were filed in the U.S. District Court for the Southern District of New York. The DOJ and SEC alleged that analyst Sebastian Pinto-Thomaz gained advance knowledge of an impending merger through his work at a credit ratings agency. He then passed the confidential information on to two of his friends. Using the material nonpublic information, the friends purchased the securities of one of the merging companies prior to the announcement. After the merger was publicly announced , the friends sold their shares and options, allegedly making $300,000 in illicit trading profits.
The SEC is seeking disgorgement of ill-gotten gains, prejudgment interest, penalties and injunctive relief against Mr. Pinto-Thomaz and his two friends. The DOJ filed criminal charges against all three individuals.
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