Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Sunday, December 2, 2012

Connecticut Executive Settles Charges He Traded on Confidential Information Learned in Bidding Process

The SEC charged  I. Joseph Massoud, a Connecticut-based business executive, with insider trading ahead of the sale of Patriot Capital Funding Group based on nonpublic information he learned at the helm of a firm involved in the bidding process.  The SEC alleges that Massoud, who founded investment advisory firm Compass Group Management, gained access to nonpublic information contained in an online “dataroom” where bidding companies could learn more about Patriot Capital’s financial condition. For access to the data, Compass Group had to enter into a confidentiality agreement that prohibited its employees from buying Patriot Capital stock. Nonetheless, Massoud purchased shares soon after Compass Group gained access to the confidential information, and he bought even more stock after he learned that Compass Group’s bid was what he described as “waaaaay off” compared to bids from other companies. Patriot Capital’s share price more than doubled after a merger was publicly announced, and Massoud realized more than $676,000 in illegal profits.

Massoud, who lives in Westport, Conn., agreed to settle the SEC’s charges by paying more than $1.4 million. He also will be barred from working in the securities industry or serving as an officer or director of a public company. The settlement is subject to court approval.

 

http://lawprofessors.typepad.com/securities/2012/12/connecticut-executive-settles-charges-he-traded-on-confidential-information-learned-in-bidding-proce.html

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