SEC Settles Insider Trading Charges Against Downstream Tippees of Former Financial Industry Analyst

ADMINISTRATIVE PROCEEDING
File Nos. 3-22087; 3-22088

September 6, 2024 - The Securities and Exchange Commission today announced settled charges against Dr. Stephen Forlano and Matthew P. Forlano for illegally trading based on information they received from their relative Stephen Forlano, Jr., whom the SEC previously charged with insider trading. See SEC v. Viggiano, et al., No. 1:23-cv-08542 (S.D.N.Y., filed Sept. 28, 2023).

According to the SEC's orders, Stephen Forlano, Jr., who is Dr. Stephen Forlano's son and Matthew Forlano's nephew, provided both men with material nonpublic information he received form his close friend Anthony Viggiano, a former financial industry analyst who worked at a major investment firm and at a global investment bank. Specifically, the SEC's order against Dr. Forlano finds that his son provided him with material nonpublic information about a possible strategic financing collaboration with Harmony Biosciences Holdings, Inc. and a potential acquisition of Maxar Technologies, Inc., and Dr. Forlano used that information to purchase Harmony and Maxar securities. The SEC's order against Matthew Forlano finds that Stephen Forlano, Jr. provided him with material nonpublic information about the potential Maxar acquisition, that Matthew Forlano used that information to purchase Maxar securities, and that Matthew Forlano unlawfully tipped a close friend. According to the orders, Dr. Forlano generated profits of $67,373, Matthew Forlano generated profits of $8,209, and Matthew Forlano's friend generated profits of $10,023.

The orders find that both Dr. Forlano and Matthew Forlano 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 orders' findings, Dr. Forlano and Matthew Forlano consented to cease-and-desist orders in which Dr. Forlano agreed to pay $67,373 in disgorgement, $7,969.02 in prejudgment interest, and a penalty of $67,373, and Matthew Forlano agreed to pay $8,209 in disgorgement, $966.08 in prejudgment interest, and a penalty of $18,232.

The SEC's investigation, which is ongoing, was conducted by Jeffrey E. Oraker and Mark L. Williams, with assistance from John Rymas, and was supervised by Danielle R. Voorhees and Joseph G. Sansone, all of the SEC's Market Abuse Unit.