SEC Charges Attorney with Insider Trading
Feb. 8, 2019
File No. 3-18993
February 8, 2019 - The Securities and Exchange Commission today charged California attorney Daniel J. Callahan with insider trading.
According to the SEC's order, Callahan traded on the basis of material, nonpublic information about an impending 2014 deal between Monster Beverage Corporation and the Coca-Cola Company, which he learned of while serving as Monster's outside counsel on a litigation matter. Shortly after Callahan's firm was contacted in connection with the companies' due diligence efforts concerning the deal, Callahan purchased over $60,000 in Monster stock in two accounts. The day after the announcement, Monster's stock price increased 30 percent and Callahan made over $19,000 in trading profits.
Without admitting or denying the findings, Callahan consented to the entry of the SEC's order, which found he violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Callahan agreed to disgorge his ill-gotten gains of $19,386, plus prejudgment interest of $3,291, and pay a civil penalty of $19,386 equal to his profits.
The SEC's investigation was conducted by Brent Wilner and was supervised by Diana Tani, John Berry, and Michele Layne of the Los Angeles Regional Office.