The U.S. attorney’s office for the Southern District of New York (SDNY) brought charges in a series of separate insider trading cases, including allegations of a Wall Street broker trading ahead of a Canadian company’s acquisition, and schemes involving SPAC deals and Covid cures.
The SDNY and the U.S. Securities and Exchange Commission (SEC) announced charges against a registered broker, Jordan Meadow, and his friend, Steven Teixeira, who was chief compliance officer of an international payment processing company. The pair allegedly traded on inside information about planned M&A deals that Teixeira allegedly stole from his then-girlfriend’s laptop (she worked at a Wall Street investment bank that advised on the deals).
The SEC alleged Teixeira used the inside information to trade in call options and passed along tips to Meadow, who also allegedly traded on the tips and advised his clients to trade on them, generating millions of dollars in profits for his clients and hundreds of thousands of dollars in commissions for Meadow.
Among the deals they allegedly traded on was Penn National Gaming Inc.’s planned acquisition of Canada’s Score Media and Gaming Inc. in mid-2021. Their trading ahead of that transaction allegedly generated more than US$5 million in illicit profits for Meadow and his clients.
“Our complaint alleges brazen betrayals of trust by Teixeira, who misappropriated information from his girlfriend’s laptop to make a quick buck, and by industry veteran Meadow, who was all too eager to use the information to line his pockets,” said Scott Thompson, associate regional director of the SEC’s Philadelphia office, in a statement.
In the SDNY, Meadow was charged with seven counts of securities fraud and one count of conspiracy. Teixeira has pled guilty under a cooperation agreement.
The SEC’s complaint seeks disgorgement with interest, civil penalties, and director/officer bans on Meadow and Teixeira.
In the other cases brought by the SDNY, an employee at Pfizer Inc. and another man were accused of trading on inside information about the outcome of clinical trials for Paxlovid, the company’s treatment for Covid-19. Both men have been charged with securities fraud and conspiracy.
Additionally, a trio of “sophisticated investors” who were invited to invest in SPACs after signing non-disclosure agreements were charged with securities fraud and conspiracy for allegedly trading on, and tipping, inside information after learning that one of the SPAC’s possible acquisition targets was Trump Media & Technology Group.
Finally, a former pharma executive was also charged with trading ahead of a planned acquisition by his company, and tipping others — including a childhood friend who was a town’s chief of police — who collectively made more than US$2.2 million in illegal profits by trading in stocks and options based on the inside information. They all face a variety of securities fraud and conspiracy charges.
The numerous allegations have not been proven.