U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21132 / July 15, 2009
SEC v. Kevan D. Acord et al. (United States District Court for the Southern District of South Florida, Case No. 09-21977-CIV-JORDAN/McAliley (July 15, 2009)
SEC'S MIAMI REGIONAL OFFICE CHARGES SIX DEFENDANTS WITH INSIDER TRADING IN NEFF CORPORATION
On July 15, 2009, the Securities and Exchange Commission filed a complaint in the United States District Court for the Southern District of Florida charging six individuals with insider trading in the securities of Neff Corporation before an April 7, 2005, announcement of its acquisition.
In its complaint, the Commission alleges that Kevan Acord, an attorney and accountant, and his partner, Philip Growney, an accountant, abused their position of trust and confidence as tax consultants to Neff when they bought $329,000 of Neff stock in the nine days before the announcement. According to the complaint, they bought the shares after learning during their work for Neff that another company might acquire it. Following the acquisition, Acord exchanged shares that he purchased for his personal account and for the account of a long time client for a profit of nearly $155,000.
The complaint also alleges that Alberto Perez, a business associate and close friend of Neff's CEO, learned of the possible acquisition while working at an office at Neff's headquarters two doors down from the acquisition due diligence teams. Perez abused his position of trust and confidence with the CEO, and misappropriated the information by tipping his brother Jose Perez. The complaint alleges that the two then used the information to purchase $282,000 of Neff stock for a brokerage account they jointly owned, in advance of the acquisition announcement. Following the acquisition, the Perezes exchanged their Neff shares for a profit of $399,000.
The complaint further alleges that Dr. Sebastian De La Maza, the father-in-law of Neff's CEO, learned about the pending acquisition from his daughter, who is married to Neff's CEO. According to the complaint, during the weeks preceding the acquisition announcement, De La Maza abused his position of trust and confidence with his daughter and misappropriated this information to buy $111,000 of Neff stock. Following the acquisition, De La Maza exchanged the Neff shares for a profit of $84,000.
Finally, the Commission's complaint alleges that Thomas Borell, a Miami lawyer and a close friend of a Neff director misappropriated information about the acquisition. He abused the position of trust and confidence with the director and bought more than $1.3 million of Neff stock during the six weeks before the announcement — much of it while he was on a family vacation with the director. According to the complaint, he used a client trust fund account to fund some of the purchases. Following the acquisition, Borell sold his Neff stock for a profit of nearly $975,000.
The complaint charges each of the defendants with violating Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder and seeks permanent injunctions, disgorgement plus prejudgment interest, and civil money penalties and an officer and director bar against Acord.
The Commission acknowledges the assistance of the Financial Industry Regulatory Authority ("FINRA") with this investigation.