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SEC Charges New York Executive With Insider Trading Ahead of Client Announcements

The Securities and Exchange Commission recently filed a complaint in the US District Court for the Southern District of New York against a director at an investor relations firm charging him with multiple instances of insider trading ahead of impending news announcements by clients. According to the complaint, Michael Anthony Dupre Lucarelli, who allegedly obtained access to material, nonpublic information through his position as a Director of Market Intelligence at a Manhattan investor relations firm, traded in securities belonging to companies that his firm was advising in advance of significant corporate announcements. The SEC alleged that Lucarelli followed a “consistent pattern” of purchasing or selling securities in the days or weeks before the client made the corporate announcement, then exiting his position shortly after the announcement, sometimes within hours. Lucarelli allegedly reaped illicit profits of nearly $1 million.  

The SEC’s complaint charges Lucarelli with violating Section 17(a) of the Securities Act of 1933, Sections 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5, and Section 14(e) of the Exchange Act and Rule 14e-3. It seeks a permanent injunction, disgorgement of profits and civil monetary penalties.       

SEC v. Lucarelli, No. 14-mj-01878 (S.D.N.Y. Aug. 25, 2014).  

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume IV, Number 241


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