The U.S. Securities & Exchange Commission said this week that it settled the case against the final five defendants in an insider trading scheme involving involving large corporate mergers.
In August 2017, U.S. authorities accused seven individuals of reaping more than $5 million in illicit profits based on tips from Daniel Rivas, whose work at Bank of America made him privy to details about corporate transactions including the then-pending, $25 billion buyout of St. Jude Medical by Abbott (NYSE:ABT). Prosecutors said that childhood friends Rivas and Roberto Rodriguez conspired to trade on confidential information and colluded with Rodolfo Sablon, Rodriguez’s friend and roommate, to create an investment fund using proceeds from the inside trades with an ownership stake going to Rivas. The former BofA IT consultant also tipped off James Moodhe, Rodolfo Sablon and Jhonatan Zoquier. Moodhe then tipped Michael Siva and Zoquier tipped Jeffrey Rogiers.
In all, tips from Rivas led to about $5 million in illegal gains, according to federal prosecutors. In April the last criminal case came to an end when Sablon was sentenced to six months in jail, plus two years of supervised release including six months in a community confinement center, and ordered to pay nearly $930,000 in penalties. Rodriguez drew one year and a day in prison; Siva was sentenced to 18 months; and Zoquier and Rogiers each drew a three-month sentence.
Parallel cases brought by the SEC were finally settled last month against Rodriguez, Rogiers, Sablon, Siva and Zoquier, the securities watchdog said. The five were each ordered to surrender their insider trading profits, but their prior disgorgements in the criminal cases satisfied those orders, the SEC said. The agency also barred Siva, Rivas and Moodhe from the securities industry.