SEC Charges Technology Company Employee with Insider Trading
Feb. 24, 2020
File No. 3-19708
February 24, 2020 - The Securities and Exchange Commission today announced settled insider trading charges against a supply chain employee of Cisco Systems, Inc., who used confidential information about an impending acquisition to unlawfully trade securities.
According to the SEC's order, Charles F. Kerwin, of North Carolina, learned about Cisco's potential acquisition of Acacia Communications, Inc. through his employment. While in possession of this confidential information, Kerwin allegedly placed a series of bullish trades in Acacia securities between July 2 and July 5, 2019. On July 9, 2019, Cisco and Acacia publicly announced that Cisco had entered into a definitive agreement to acquire Acacia. As a result, the order finds, Kerwin realized illicit profits of $94,860. According to the SEC's order, two days after the acquisition was announced, Kerwin voluntarily reported his Acacia securities trading to the Commission staff and thereafter cooperated in the Commission investigation.
The SEC's order finds that Kerwin violated the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the findings, Kerwin agreed to a cease-and-desist order and agreed to pay disgorgement of $94,860 and a civil money penalty of $47,430.
The SEC's investigation was conducted by Walker Newell, with assistance from John S. Rymas, and supervised by Steven Buchholz and Joseph G. Sansone, Chief of the Market Abuse Unit. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.