SEC Charges Connecticut Executive With Insider Trading

The U.S. Securities and Exchange Commission (SEC) has charged an executive at Stamford, Conn.-based electronics company, Harman International Industries, with insider trading in the company’s stock.

The SEC alleged that Dennis Wayne Hamilton made more than $130,000 in illegal profits by trading on nonpublic information he learned on the job in advance of Harman’s release of its fiscal year 2014 first-quarter earnings.

According to the SEC:

  • In his role as Harman’s vice president of tax, Hamilton reviewed Harman’s earnings and learned the company would report stronger-than-expected results for its FY14 first quarter, which spanned from July 1 to Sept. 30, 2013.
  • The day before Harman publicly released the financial results, Hamilton purchased 17,000 shares of Harman stock at a cost of more than $1.2 million. He liquidated his position when the quarterly results were publicly announced.
  • Harman’s stock price rose more than 12 percent on the news and Hamilton’s illicit trading produced one-day profits in excess of $130,000.

Sharon B. Binger, director of the Philadelphia Regional Office, commented:

We allege that Hamilton traded on details known only to company insiders and took advantage of the stock market’s fair and level playing field.

At the same time, in a parallel action the U.S. Attorney’s Office for the District of Connecticut announced criminal charges against Hamilton.

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