SEC Charges New Jersey Resident With Multiple Instances of Insider Trading

May 24, 2011

The SEC charged Abraham Haim a New Jersey resident and self-employed technology consultant, with insider trading in the securities of five companies based on material nonpublic information regarding potential acquisitions he misappropriated from a relative, an investment banker, who by virtue of his employment, had material nonpublic information regarding the acquisitions.


The SEC stated that between April 2006 and March 2007, Haim, purchased securities in advance of merger and acquisition announcements based on material nonpublic information in Intergraph Corporation, Metasolv, Inc., Open Solutions Inc., Aeroflex Incorporated, and MapInfo Corporation in brokerage accounts he owned or controlled.  According to the SEC, Haim knew that the relative owed a duty of confidentiality to his employer and his employer’s clients. Despite knowing that the relative could not, and did not, share nonpublic information with him, Haim misappropriated such information and used it for his own benefit. As a result of his trading, the SEC found that Haim generated $30,126 in illegal profits.

The SEC stated that Haim and the relative shared a relationship of trust and confidence. Unbeknownst to the relative, Haim allegedly surreptitiously listened to the relative’s private telephone conversations about the potential transactions, and read confidential documents, which referenced the transactions. By trading on the material nonpublic information he heard and saw, the SEC stated that Haim allegedly breached his duty of trust and confidence that he owed to the relative.

Click here to access the administrative action.


Categories

Enforcement Actions, Investment Advisers, Investment Companies