Sadis & Goldberg Obtains Favorable Settlement of No Bar or Suspension for Former Executive of Investment Bank in High-Profile SEC Insider Trading Case

Settlement permits client to continue in securities industry, while neither admitting nor denying one charge of negligence-based § 17(a)(3) claim, and paying minimal penalty. Sadis & Goldberg LLP is pleased to announce a very favorable settlement for its client in a high-profile SEC case alleging multiple counts of insider trading. The May 28, 2015 settlement is notable, because it imposes no bar or suspension on our client at all, while permitting him to neither admit nor deny one claim of a negligence-based violation of §17(a)(3) of the Securities Act of 1933, and pay a relatively small $75,000 civil penalty. It is very rare for the SEC to settle an insider trading case against a securities professional with no bar or suspension.[1]

This favorable settlement is particularly exceptional, because the SEC initially alleged as many as nine claims of tipping inside information under fraud-based statute § 10(b) of the Exchange Act of 1934. But Sadis & Goldberg dealt the SEC's case a severe blow by winning a partial grant of summary disposition against the SEC's primary legal theory. The SEC's own in-house Administrative Law Judge rejected the SEC argument that the personal benefit requirement does not apply to insider trading claims under the misappropriation theory.[2] This result was so significant that it was widely covered by the Wall Street Journal, the New York Times' Dealbook column, Reuters, and Law360. [3]

Sadis & Goldberg obtained this favorable outcome by litigating the case all the way to the last day before trial - and showing the SEC we were prepared to try the case to victory. By employing this strategy, our firm was able to extract a settlement offer from the SEC that was far better than what was available at the beginning of the case. Most importantly, the SEC's settlement offer permitted our client to resume his career as a leading securities professional.

In short, this was another example that the way to get the best outcome against the SEC is by preparing to fight.

Sadis & Goldberg LLP Partner Sam Lieberman led the defense of our client at the investigation and litigation stages, and was assisted by Dan Viola and Michelle Tanney. If you have any questions about this case, please contact Sam Lieberman at (212) 573-8164 or


[1] See SEC Sec. Rel. No. 9795 (May 28, 2015), [2] See SEC Ad. Pro. Rel. No. 2309 (Feb. 12, 2015) [3] See, e.g., J. Eaglesham "Pivotal Insider Ruling is Put to Test," Wall St. Journal (Jan. 7, 2015); P.J. Henning, "Fallout Builds from Insider Trading Ruling," N.Y. Times Dealbook (Jan. 20, 2015), available at; N. Raymond, "Judge Signals May Toss Ex-Wells Fargo Employees' Insider Trading Case," Reuters (Feb. 11, 2015), available at; see also

Cheryl Spratt