SEC Obtains Final Judgments Against Two Family Office Executives Charged with Insider Trading
On November 14, 2022, the United States District Court for the Southern District of New York entered a final consent judgment against Charles Rustin "Rusty" Holzer, a manager of a family office, whom the SEC previously charged with insider trading. On October 28, 2022, a final consent judgment was entered against Fernando Moraes, the former Chief Operating Officer of Holzer's family office, who was also previously charged with insider trading.
The SEC's complaints, filed on September 30, 2022, alleged that Holzer and Moraes traded in options of Dun & Bradstreet Corp. (NYSE: DNB) based on material nonpublic information ahead of the company's August 8, 2018 announcement that it had agreed to be acquired by a private investor group at a price of $145 per share, realizing ill-gotten profits of $96,091 and $8,842, respectively. The SEC alleged that Holzer and Moraes learned about the pending acquisition from a member of the investor group pursuant to a non-disclosure agreement, and that in addition to trading for themselves, Holzer and Moraes unlawfully tipped two other traders who realized profits of $672,000 and $65,332, respectively.
On October 4, 2022, Holzer consented, without admitting or denying the SEC's allegations, to a judgment in which he was permanently enjoined from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and barred from acting as an officer or director of a public issuer. The final judgment entered on November 14, 2022 orders Holzer to pay disgorgement of $91,509 plus prejudgment interest of $14,217.67 and a civil penalty of $763,509.
Without admitting or denying the allegations, Moraes consented to the entry of a final consent judgment that permanently enjoins him from violating Section 10(b) and Rule 10b-5 of the Securities Exchange Act, orders him to pay disgorgement of $8,842 plus prejudgment interest of $1,647, and a civil penalty of $48,646, and bars him from acting as an officer or director of a public issuer.
The SEC's investigation was conducted by Derek Schoenmann and Elizabeth Baier of the New York Regional Office with assistance from Richard Hong of the Trial Unit. The investigation was supervised by Celeste Chase and Thomas P. Smith, Jr. Messrs. Hong and Schoenmann handled the litigation.
Read the original litigation release from the U.S. Securities and Exchange Commission here.Click Here to Follow SEC Alerts