U.S. Securities and Exchange Commission
Litigation Release No. 21977 / May 24, 2011
Securities and Exchange Commission v. Abraham Haim, Civil Action No. 11-CV-295 (D.N.J. May 24, 2011)
SEC CHARGES NEW JERSEY RESIDENT WITH MULTIPLE INSTANCES OF INSIDER TRADING
The Securities and Exchange Commission today charged Abraham Haim with insider trading in the securities of five companies based on material nonpublic information regarding potential acquisitions he misappropriated from a relative, an investment banker, who by virtue of his employment, had material nonpublic information regarding the acquisitions. Haim and the relative shared a relationship of trust and confidence. Unbeknownst to the relative, Haim surreptitiously listened to the relative's private telephone conversations about the potential transactions, and read confidential documents, which referenced the transactions. By trading on the material nonpublic information he heard and saw, Haim allegedly breached his duty of trust and confidence that he owed to the relative.
The Commission's complaint alleges that between April 2006 and March 2007, Haim, a New Jersey resident and self-employed technology consultant, purchased securities in advance of merger and acquisition announcements based on material nonpublic information in Intergraph Corporation, Metasolv, Inc., Open Solutions Inc., Aeroflex Incorporated, and MapInfo Corporation in brokerage accounts he owned or controlled. According to the complaint, Haim knew that the relative owed a duty of confidentiality to his employer and his employer's clients. Despite knowing that the relative could not, and did not, share nonpublic information with him, Haim misappropriated such information and used it for his own benefit. As a result of his trading, Haim generated $30,126 in illegal profits.
Without admitting or denying the SEC's allegations, Haim agreed to settle the charges against him. The settlement is pending final approval by the court. Specifically, Haim consented to the entry of a final judgment permanently enjoining him from violating Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder, ordering him to pay disgorgement of $30,126 plus prejudgment interest of $7,188 and imposing a civil penalty of $30,126.
The SEC acknowledges the assistance of FINRA in connection with this matter.