SEC Charges Saverio Barbera with Insider Trading
On April 5, 2018, the Securities and Exchange Commission charged Saverio Barbera with tipping his brother and father with material nonpublic information about an upcoming corporate acquisition.
The SEC’s complaint, filed in the United States District Court for the Eastern District of New York, alleges that, in 2014, Saverio Barbera (“Barbera”), learned that Owens & Minor, Inc., a Virginia-based healthcare logistics company, was going to acquire all of the outstanding shares of Medical Action Industries, Inc. (“Medical Action”), a Brentwood, New York, medical products supplier. According to the complaint, Saverio Barbera then told his father and brother that they should purchase Medical Action stock in advance of the acquisition so that they could profit from the deal. The SEC alleges that Saverio Barbera obtained the information that he tipped to his father and brother from his close friend, the Chief Executive Officer and a member of the Board of Directors of Medical Action. According to the SEC’s complaint, soon after receiving this tip and less than a week before the public announcement of the deal, Saverio Barbera’s father and brother purchased a combined total of 22,000 shares of Medical Action common stock, which they then sold at a profit following the deal’s announcement. The SEC alleges that, as a result of their trading, Saverio Barbera’s father and brother realized combined trading profits of approximately $145,000.
Saverio Barbera has agreed to settle the SEC’s charges by paying a penalty of $289,650.72, an amount which is twice the trading profits of his father and brother. Without admitting or denying the SEC’s allegations, Saverio Barbera has also agreed to the entry of a final judgment that enjoins him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, thereunder. The settlement is subject to court approval.
The SEC’s investigation, which is continuing, is being conducted by John O’Halloran and H.B. Roback of the SEC’s Atlanta Office, and is being supervised by Stephen E. Donahue and Aaron W. Lipson also of the SEC’s Atlanta Office. The SEC acknowledges the assistance of the FINRA in this matter.
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