SEC charges accountant over $6.2m insider trading
11 Jul 2019
The US Securities and Exchange Commission (SEC) has filed insider trading charges against an accountant who tipped off a friend about confidential financial information
11 Jul 2019
The tip-off was made ahead of public announcements about a scheme which the US regulator alleges generated profits of more than $6.2m (£5m) and was uncovered by the analysis and technology that it uses to detect suspicious trading activity.
The SEC said Martha Bustos, formerly an accountant at Illumina and a certified public accountant, and a close friend Donald Blakstad, engaged in a scheme to trade based on confidential revenue information in exchange for all-expense paid travel and other expensive gifts.
Bustos allegedly tipped Blakstad in advance of four quarterly Illumina financial performance announcements from April 2016 to July 2018. Based on the inside information, Blakstad allegedly purchased Illumina securities using accounts held by business associates and acquaintances to conceal his involvement.
According to the SEC, Blakstad personally gained around $4m from the illicit trading and tipped at least four other friends and business associates who made $2.2m.
Kelly Gibson, associate director of the SEC’s Philadelphia regional office, said: ‘We used some of our latest advanced software to analyse trading data, as well as traditional investigative techniques, to piece together and expose the betrayal of trust alleged in our complaint.
‘We allege that Bustos had an obligation to keep her company’s information confidential until announced to our markets, yet she repeatedly tipped Blakstad and allowed him to take advantage of her position in return for expensive travel and luxury merchandise.’
In a parallel action to the SEC’s complaint, the US attorney’s office for the Southern District of New York has filed criminal charges against Bustos and Blakstad.
By Pat Sweet