SEC Charges Two Chicago Residents with Insider Trading
Litigation Release No. 24587 / September 5, 2019
U.S. Securities and Exchange Commission v. Keith G. Daubenspeck and Geoffrey L. Homer, No. 19-cv-05939 (N.D. IL filed September 5, 2019)
The Securities and Exchange Commission today filed insider trading charges against Chicago residents Keith Daubenspeck and Geoffrey Homer for engaging in illegal insider trading in the stock of Ulta Beauty, Inc.
The SEC's complaint, filed in the U.S. District Court for the Northern District of Illinois, alleges that Daubenspeck purchased Ulta stock in advance of two positive earnings releases by Ulta. As alleged, Daubenspeck was tipped by Homer, his close friend since childhood, who misappropriated confidential nonpublic information regarding Ulta's positive financial results from his long-term girlfriend, a high-ranking Ulta employee. The complaint further alleges that after being tipped by Homer, Daubenspeck spent over $1.5 million to purchase stock in advance of the Ulta's public earnings announcements in August 2015 and February 2016. After Ulta issued its earnings releases, Daubenspeck sold the stock for combined profits of $111,472.
The complaint charges Daubenspeck and Homer with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and seeks permanent injunctions and monetary relief. Without admitting or denying the allegations in the complaint, Daubenspeck consented to a final judgment permanently enjoining him from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule10b-5 thereunder. Daubenspeck also agreed to pay $111,472 in disgorgement, $17,586 in prejudgment interest, and a $111,472 civil penalty. The settlement is subject to Court approval.
The SEC's investigation was conducted by Richard G. Stoltz and Craig McShane of the Chicago Regional Office and Patrick McCluskey of the Market Abuse Unit and was supervised by Anne C. McKinley. The litigation will be led by Benjamin J. Hanauer and Mr. Stoltz.