SEC Obtains Final Judgments in Insider Trading Case Against Former Software Executive and Two Friends
Litigation Release No. 24499 / June 12, 2019
Securities and Exchange Commission v. Christopher Salis, et al., No. 2:16-cv-00231 (N.D. Ind. filed June 16, 2016)
On June 12, 2019, the Honorable Philip P. Simon of the District Court for the Northern District of Indiana entered final judgments on consent against former SAP executive Christopher Salis and two of Salis's friends, Douglas Miller and Edward Miller, to resolve pending insider trading claims.
The SEC's complaint, filed on June 16, 2016, charged Salis and brothers Douglas Miller and Edward Miller with insider trading in advance of an announcement that SAP intended to acquire Concur Technologies. On May 16, 2019, the Commission filed an amended complaint alleging that Salis was entrusted with confidential information concerning the pending merger by a close friend at Concur and then tipped Douglas Miller about the upcoming acquisition. Douglas Miller then tipped Edward Miller, and they rushed to place risky, short-term trades in Concur call options. After the Concur deal was announced, Douglas Miller, Edward Miller and other friends and family members who traded collectively made over a half a million dollars in profit on the call options and, as alleged in the complaint, kicked a portion of the proceeds back to Salis.
The final judgments resolve all claims against Salis, Douglas Miller, and Edward Miller. Salis consented to an order requiring him to disgorge $90,400 in ill-gotten gains, plus $2,067 prejudgment interest; Douglas Miller consented to an order requiring him to disgorge $119,003 in ill-gotten gains, plus $22,258 prejudgment interest; and Edward Miller consented to an order requiring him to disgorge $149,117 in ill-gotten gains, plus $27,891 prejudgment interest. In addition to ordering this monetary relief, the final judgments permanently enjoin Salis, Douglas Miller, and Edward Miller from violating the antifraud provision in Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Salis and Douglas Miller are also permanently enjoined from violating Section 14(e) of the Exchange Act and Rule 14e-3 thereunder. The SEC also dismissed insider trading charges originally filed against Barrett Biehl, one of the Millers' friends.
As detailed in the final judgement, disgorgement for all three defendants is deemed satisfied by orders of forfeiture entered against each in parallel criminal actions in the Northern District of Indiana, brought by the Fraud Section of the U.S. Department of Justice's Criminal Division. In the action against Salis, he pleaded guilty to conspiracy to commit securities and wire fraud and on March 22, 2019, was sentenced to six months in prison. Douglas Miller pleaded guilty to conspiracy to commit securities and wire fraud and making false statements to law enforcement and on March 14, 2019, was sentenced to twenty-four months in prison. Edward Miller pleaded guilty to one count of conspiracy to commit securities and wire fraud and to obstruction of justice, and was sentenced to six months in prison.
The SEC's investigation was conducted by Adam B. Gottlieb, Brianna Ripa, and Amy Friedman, with assistance from John S. Rymas in the Market Abuse Unit's Analysis & Detection Center. The case has been supervised Carolyn M. Welshhans and Robert A. Cohen. The SEC's litigation has been led by Cheryl Crumpton. The SEC appreciates the assistance of the Fraud Section of the Department of Justice's Criminal Division, the United States Postal Inspection Service, and the Financial Industry Regulatory Authority (FINRA).