U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission


Litigation Release No. 21267 / October 29, 2009

Securities and Exchange Commission v. J. Bennett Grocock, Civ. Action No. 09-cv-1833 (M.D. Fla.) (GJK)

SEC Files Settled Insider Trading Charges against CyberKey Solutions, Inc.'s Former Outside Counsel

Today the Securities and Exchange Commission ("Commission") filed a civil action in the U.S. District Court for the Middle District of Florida, alleging that J. Bennett Grocock, the former outside counsel for CyberKey Solutions, Inc. ("CyberKey"), made at least $170,000 by selling shares of the company's stock while in possession of material, nonpublic information about the company. Grocock also sold CyberKey shares before he possessed material, nonpublic information about the company, but none of the shares he sold were issued under a registration statement or with any legitimate exemption from registration.

According to the Commission's complaint, Grocock became aware in the summer and fall of 2006 that CyberKey was under investigation for possible securities violations by several different agencies, including the Commission, the then-National Association of Securities Dealers, and the Utah Division of Securities. Despite being aware of these investigations, any one of which would have had material consequences for the company if carried forward to its logical conclusion, Grocock continued to sell CyberKey shares and in fact accelerated his sales after learning of the Commission's investigation in mid-November 2006. Grocock generated $248,800 in total from his sales, which ended shortly after CyberKey's CEO was arrested and charged with civil and criminal securities fraud, among other things, in March 2007.

Grocock has consented, without admitting or denying the allegations in the complaint, to a permanent injunction against future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as against future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933. On the basis of sworn financial statements and other documents and information furnished to the Commission, payment of disgorgement was waived and civil penalties were not imposed.

SEC Complaint



Modified: 10/29/2009