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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23783 / March 20, 2017

Securities and Exchange Commission v. Michael J. Maciocio and David P. Hobson, Civil Action No. 1:16-cv-4139 (AT) (SN) (S.D.N.Y.)

Court Enters Final Judgments Against Two Rhode Island Men Charged With Insider Trading

On March 15, 2017, the Honorable Analisa Torres of the United States District Court for the Southern District of New York entered final judgments on consent against two Rhode Island men charged with insider trading in the securities of deal targets being pursued by the pharmaceutical company where one of them worked.

The SEC's complaint, filed on June 3, 2016, alleged that Michael J. Maciocio obtained confidential clinical and business data about other pharmaceutical firms being considered by his employer for potential acquisitions and business relationships, and that he used the nonpublic information to trade in their stocks. Maciocio made approximately $116,000 in illegal profits trading in the stocks of such pharmaceutical companies as Medivation Inc., Ardea Biosciences, and Furiex Pharmaceuticals. The SEC further alleged that Maciocio illegally tipped his friend since childhood, stockbroker David P. Hobson, who utilized the nonpublic information to realize at least $187,000 in illicit trading profits for himself and $145,000 for his customers.

On May 20, 2016, Maciocio pled guilty to insider trading charges in a parallel criminal case and is awaiting sentencing. On June 24, 2016, in the SEC case, the Court entered a consent judgment that permanently enjoined Maciocio from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. On October 25, 2016, Hobson pled guilty to insider trading charges in the parallel criminal case; on March 15, 2016, he was sentenced to six months of incarceration and two years of supervised release and was ordered to forfeit $385,664.39 and pay a special assessment of $200.

The final judgment against Maciocio orders Maciocio to pay disgorgement of $116,779.42, together with prejudgment interest of $11,407.11, for a total of $128,186.53, which will be deemed satisfied, dollar for dollar, by the forfeiture order, of any, to be entered against Maciocio at sentencing in the parallel criminal case.

The final judgment against Hobson permanently enjoins him from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The judgment also orders Hobson to pay disgorgement of $311,168.40, together with prejudgment interest of $74,669.88, for a total of $385,838.28, which will be deemed partially satisfied by the forfeiture order entered against him in the parallel criminal case.

The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.

 

https://www.sec.gov/litigation/litreleases/2017/lr23783.htm


Modified: 03/20/2017