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SEC: Research Analyst Is Insider Trading in Mother’s Brokerage Account

The SEC alleges that John Afriyie found out about an impending acquisition of home security company The ADT Corporation when prospective acquirer Apollo Global Management approached the Manhattan-based investment firm where he was employed and discussed potential debt financing for a public-to-private deal. Afriyie subsequently accessed several highly confidential, deal-related documents on the firm’s computer network and purchased thousands of high-risk, out-of-the-money ADT call options in his mother’s account in anticipation that ADT’s stock price would rise when the transaction was publicly announced. The ADT deal was announced on February 16, and afterwards Afriyie sold all of the ADT options in his mother’s account to obtain his illicit profits.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Afriyie.

“Insider traders should have learned by now that trying to hide their illegal activity in a relative’s account ultimately won’t work,” said Jina L. Choi...


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