SEC Charges Biotechnology Company CPA with Insider Trading
June 5, 2020
File No. 3-19824
June 5, 2020 - The Securities and Exchange Commission today announced settled insider trading charges against a CPA in the revenue recognition group at Illumina, Inc. for using confidential information about disappointing company revenues to unlawfully trade securities.
According to the SEC's order, at a late June 2019 meeting, an Illumina accounting manager told contract accountant Jana Faith Kiena and others that the company would have disappointing revenues for its second quarter of 2019. The SEC's order finds that, shortly after the meeting, Kiena bought a total of 50 short-term out-of-the-money Illumina put option contracts. On July 11, 2019, Illumina announced that its second quarter revenues would be lower than expected and updated its full year revenue guidance. The order finds that the stock price dropped, and Kiena sold the 50 option contracts, netting $249,227 in ill-gotten gains. According to the SEC's order, in August 2019, Kiena voluntarily reported her Illumina securities trading to SEC staff and thereafter cooperated in the SEC's investigation.
The order finds that Kiena 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, Kiena agreed to a cease-and-desist order, to pay disgorgement of $249,227 and a civil money penalty of $124,613, and to be denied the privilege of appearing or practicing before the Commission as an accountant. After two years, Kiena may request that the Commission consider her reinstatement.
The SEC's investigation was conducted by Todd Brilliant and supervised by Finola Manvelian. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.