Steven Watson Charged with Insider Trading – Securities Attorneys
On November 17, 2015 the Securities and Exchange Commission charged Steven Watson with insider trading fraud, claiming he illegally profited from news of a proposed acquisition of Cooper Tire and Rubber Company by Apollo Tyres Ltd.
Earlier this year, the SEC charged two long-time friends, Amit Kanodia and Iftikar Ahmed, with insider trading fraud and alleged that another close friend of Kanodia also profited by trading on the confidential information provided by Kanodia. In a separate complaint filed November 12, 2015, the SEC filed fraud charges against Watson, another close friend of Kanodia.
In its complaint, the SEC alleged that by April 2013, India-based Apollo Tyres was engaged in serious negotiations to acquire Cooper Tire of Findlay, Ohio. Although the acquisition was never completed, the complaint states that Cooper Tire’s stock price jumped 41% when the acquisition was announced in June 2013. The SEC claims that Kanodia learned of the deal from his wife (then the general counsel of Apollo) and tipped the news to Watson prior to the acquisition announcement.
According to the SEC’s complaint, Watson bought Cooper Tire stock and options based on Kanodia’s tip. After the deal was public, Watson allegedly liquidated his Cooper Tire holdings for a total profit of nearly $170,000. Consistent with an agreement between the two friends, Watson allegedly paid Kanodia more than $22,000, which represented a percentage of his profits.
Watson has consented to the entry of an injunction from violations of Section 10(b) of the Securities Exchange Act of 1933 and Rule 10b-5 thereunder and to pay disgorgement and a civil penalty to be determined at a later date. In consenting to the judgment, Watson admitted certain facts, including that he traded based on material nonpublic information he received from Kanodia, and acknowledged that his conduct violated the federal securities laws. On September 11, 2015, Watson pled guilty to criminal charges brought by the U.S. Attorney’s Office for the District of Massachusetts stemming from the same conduct.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.