Thursday, January 17, 2013
The SEC settled charges against Eric Rogers, a former proprietary trader at the now-defunct registered broker-dealer Spectrum Trading, LLC. The SEC alleged that Rogers used inside information to trade ahead of the September 28, 2007 announced acquisition of 3Com Corp.
According to the SEC, Arthur Cutillo and Brien Santarlas, two former attorneys at the law firm Ropes & Gray LLP, misappropriated from their law firm material, nonpublic information, including the 2007 announced acquisition of 3Com. As alleged in the complaint, Cutillo tipped the inside information, through another attorney, to Zvi Goffer, a proprietary trader at the broker-dealer Schottenfeld Group LLC, in exchange for kickbacks. The SEC alleges that Goffer tipped the inside information to, among others, his brother Emanuel, who worked with Rogers at Spectrum. The complaint alleges that Emanuel Goffer tipped the information to Rogers, who, based on that information, purchased 3Com securities in a proprietary account at Spectrum, resulting in total illicit profits of approximately $207,000. Rogers’ personal share in the trading profits was $103,500.
The SEC settlement waives disgorgement of Rogers' trading profits, and no civil penalty will be imposed, in light of Rogers’ financial condition. The SEC previously charged Cutillo, Santarlas, Zvi Goffer, Emanuel Goffer and nine other defendants in connection with this insider trading scheme.