(February 1 – 18:00 ET) – The U.S. Securities and Exchange Commission has filed a civil injunctive action against a former investment banker from Merrill Lynch, in federal court in Manhattan, charging him with illegal insider trading in June 1998.

The complaint, which identifies the former banker only as “Bonrouhi”, is accused of selling stock in IWL Communications Inc., a Merrill Lynch client, while in possession of material, nonpublic information concerning IWL’s quarterly financial performance and unfavorable developments in a prospective merger involving IWL. By selling his IWL stock prior to a public announcement of that information, the SEC says Bonrouhi illegally avoided losses of $4,160.

Simultaneous with the filing of the complaint, Bonrouhi consented, without admitting or denying the allegations in the complaint, to the entry of a final judgment. The judgement enjoins him from committing future violations; orders him to disgorge $4,160 in the trading losses that he illegally avoided, and to pay prejudgment interest on that amount; and orders him to pay a civil penalty of $4,160.
-IE Staff