U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23398 / November 2, 2015
Securities and Exchange Commission v. Vlad B. Spivak, et al.,, Civil Action No. 1:15-cv-13704-FDS (D. Mass., filed November 2, 2015)
SEC Charges Boston Area Resident in Insider Trading Scheme
The Securities and Exchange Commission today announced charges against a Boston area resident for insider trading in advance of an acquisition of a dental practice management company by a private equity firm based on confidential information he learned from his then-girlfriend.
In a complaint filed in the U.S. District Court for the District of Massachusetts, the SEC alleges that, in 2011, Vlad B. Spivak, then a resident of Medford, Massachusetts, traded in the securities of American Dental Partners, Inc. (“ADPI”) on the basis of tips of material nonpublic information that he received from his romantic partner, Shirmila O. Doddi. The complaint alleges that Doddi, who was then a financial analyst at a commercial bank, provided Spivak with material, nonpublic information that she had obtained in the course of her employment regarding an impending acquisition of ADPI by a private equity firm. The complaint further alleges that following the public announcement of the acquisition, the price of ADPI stock rose by seventy-nine percent and Spivak, who had traded in accounts held in his name and in the name of his mother, realized profits of over $222,000. Doddi did not trade in ADPI stock.
The SEC’s complaint charges Spivak and Doddi with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, which are antifraud provisions of the federal securities laws. Without admitting or denying the allegations in the SEC’s complaint against her, Doddi has consented to the entry of a judgment that permanently enjoins her from future violations of Section 10(b) and Rules 10b-5 and orders further proceedings for the purposes of determining the appropriate amount of disgorgement, prejudgment interest thereon, and civil penalties. The settlement with Doddi is subject to approval by the Court.
The SEC’s investigation was conducted by Jason Litow with assistance from Kevin Gershfeld in the Office of Market Intelligence-Surveillance. The investigation was supervised by Yuri B. Zelinsky and Antonia Chion. The SEC’s litigation is being led by John Worland. The SEC acknowledges the assistance and cooperation of the Financial Industry Regulatory Authority.