SEC to Settle with Five Involved in Insider Trading Scheme

Daniel Rivas, who worked at Bank of America, leaked nonpublic information about 30 mergers, acquisitions and tender offers.

The Securities and Exchange Commission today said it would settle insider trading charges with five people accused of generating ‘millions of dollars’ based on tips from a former IT employee of a large bank about dozens of pending corporate transactions.

The SEC said Daniel Rivas, who worked in Bank of America, leaked nonpublic information about potential mergers, acquisitions and tender offers. From October 2014 to April 2017, the alleged tipper passed confidential details about the bank’s clients more than 30 times to co-conspirators, who then traded on the tips.

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According to the complaint, the former executive, who later worked at the Royal Bank of Canada, is accused of violating ‎federal laws by using knowledge of nonpublic events related to certain securities.‎

Other defendants include Rivas’ friends Roberto Rodriguez, Jeffrey Rogiers, Rodolfo Sablon, Michael Siva, Jhonatan Zoquier, and James Moodhe, the father of Rivas’ girlfriend.

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Over $5 million in profit

All seven defendants were arrested and faced related SEC’s civil charges in a 54-count indictment for their involvement in three overlapping schemes. The regulator explained the current enforcement situation in the settlement statement, which reads:

“The Securities and Exchange Commission has obtained final judgments against Roberto Rodriguez, Jeffrey Rogiers, Rodolfo Sablon, Michael Siva, and Jhonatan Zoquier, five defendants the agency charged in 2017 with engaging in a wide-reaching insider trading scheme. The SEC also barred Siva from the securities industry. In 2017 and 2018, the Commission obtained partial final judgments against Daniel Rivas and James Moodhe, the remaining defendants in the case, and barred Rivas and Moodhe from the securities industry.”

Rivas worked as a technology consultant in the Research and Capital Markets Technology Group of Bank of America. In this role, he had access to the bank’s internal system that contains confidential information about hundreds of unannounced potential business dealings.

The defendants allegedly made over $5 million in profit through the inside trading involving transactions such as the takeovers of St. Jude Medical Inc by Abbott Laboratories and Monsanto Co MON.N by Bayer AG.

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