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Mar 26, 2018

Securities and Exchange Commission (SEC): Joseph Spera, et al. (Release No. LR-24084; Mar. 26, 2018).

sec.gov

Joseph Spera, et al. (Release No. LR-24084; Mar. 26, 2018)


Litigation Release No. 24084 / March 26, 2018

Securities and Exchange Commission v. Joseph Spera, et al., Civil Action No. 17-cv-12875 (D.N.J., filed December 11, 2017)

The Securities and Exchange Commission on December 11, 2017 charged a former day trader with making more than $1 million in illegal insider trading profits as part of a ring that allegedly stole confidential information from investment banks and clients so they could trade in advance of secondary stock offerings.
The SEC alleges that Joseph Spera schemed with former colleagues, posing as legitimate portfolio managers to induce investment bankers to bring them ''over the wall'' and share nonpublic details about upcoming secondary offerings while agreeing not to disclose the information to others or trade before the offerings were announced.  Spera and the others involved allegedly violated those agreements and tipped each other with confidential information that enabled them to trade for a profit ahead of public announcements, in violation of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder and Rule 105 of Regulation M.
The SEC and criminal authorities previously charged four others in the alleged insider trading ring in parallel actions.  In total, the alleged insider trading by Spera and the others generated approximately $5.5 million in illicit profits, including illegal trades they made based on nonpublic information they obtained ahead of a major announcement by a large pharmaceutical company.
The U.S. Attorney's Office for the District of New Jersey has filed a parallel criminal action against Spera, who agreed to plead guilty.  Spera's childhood friend Paul Petrello and two others charged initially, Steven Costantin and Ronald Chernin, have pleaded guilty in the criminal actions and agreed to partial settlements in the SEC cases with potential monetary sanctions to be determined at a later date.  Litigation continues against the alleged ringleader of the scheme, Steven Fishoff, who recruited Spera into the fold along with Petrello.
The SEC's investigation, which is continuing, has been conducted by David Austin, Chevon Walker, Matthew Lambert, Stephen Johnson and George Stepaniuk.  The litigation is being led by Todd Brody, and the case is being supervised by Mr. Wadhwa. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of New Jersey and the Federal Bureau of Investigation as well as the Financial Industry Regulatory Authority and the Options Regulatory Surveillance Authority.