An investor who learned about a pending merger after being approached to make a private equity investment in a biotech company has now settled insider trading charges from the U.S. Securities and Exchange Commission (SEC).
The regulator alleged that Bruce Conway engaged in insider trading back in July 2020 when he purchased Cancer Genetics Inc. (CGIX) stock while in possession of confidential information about its plans for a merger with the private biotech company.
According to the SEC’s allegations, Conway’s investment advisor contacted him about investing in a private company, and after signing a confidentiality agreement in connection with that investment opportunity, he learned from his advisor that the company would be merging with CGIX.
Conway then began acquiring CGIX stock in 15 different brokerage accounts, including accounts that belonged to his wife and children, along with family-owned trust accounts.
When the merger was announced about a month later, CGIX’s stock price jumped by more than 200% and Conway’s trading generated approximately US$160,000 in illicit trading profits, the regulator said.
Now, the SEC has filed a proposed final judgment in U.S. district court in Texas that would settle the case, imposing a civil penalty of US$160,000, along with $79,661 in disgorgement and interest. It’s also imposing a permanent injunction on Conway.
Conway consented to the entry of the final order, without admitting the SEC’s allegations.