A former corporate executive who dumped his shares of toymaker Funko Inc. after learning that the CEO — a friend since high school and his former college roommate — would be leaving the firm, has settled insider trading charges.
The U.S. Securities and Exchange Commission (SEC) filed a settled enforcement action against Jon Kipp, a former Funko employee and long-time friend of the company’s CEO, Brian Mariotti, for allegedly trading ahead of the company’s July 2023 announcement that Mariotti would be taking a sabbatical and stepping down as CEO.
According to the SEC’s complaint, which was filed in U.S. district court in Washington state, two days before Funko announced that Mariotti would be taking a leave from the company, Mariotti texted Kipp and told him that he would be leaving the firm.
Following the text exchange, Kipp allegedly sold all of his shares in Funko — which, the SEC said, avoided almost US$500,000 in losses when the company’s stock dropped approximately 19% on the news.
Without admitting the regulator’s allegations, Kipp consented to the entry of a final judgment, which requires him to pay almost US$1.1 million in disgorgement and penalties. The settlement is subject to court approval.