Investment Fund Law Blog
The Securities and Exchange Commission (the “SEC”) charged Kevin McGrath, a partner at a New York investor relations firm with insider trading. According to the SEC complaint, McGrath allegedly received confidential information from clients in order to prepare press releases. The SEC discovered McGrath used non-public information from two different clients to buy or sell such clients’ securities for his personal benefit.
While high dollar insider trading cases are common news, this case involves profits of a mere $11,776. The financial penalties were similarly small and McGrath settled the case with a disgorgement of $11,776, interest of $1,492 and a penalty of $11,776, in addition to a prohibition on trading in any client security. Those with access to insider information should see this case as a reminder that no instance of insider trading will be ignored by the SEC.