SEC Charges Two Additional Traders in International Insider Trading Scheme
Litigation Release No. 24761 / March 6, 2020
Securities and Exchange Commission v. Tomer Feingold and Dov Malnik, No. 20-civ-01881 (S.D.N.Y. filed March 3, 2020)
On March 3, 2020, the Securities and Exchange Commission charged two traders in connection with a long running international insider trading scheme. The traders allegedly generated profits of more than $4 million trading in the securities of U.S. public companies in advance of news that these companies had been targeted for acquisition.
According to the SEC's complaint filed in federal court in Manhattan, Tomer Feingold and Dov Malnik, both Israeli citizens who reside in Switzerland, participated in an international insider trading scheme between 2013 and 2015. The complaint alleges that Feingold and Malnik indirectly obtained nonpublic information about impending corporate transactions from Benjamin Taylor and Darina Windsor, London-based investment bankers, both of whom the SEC charged in October 2019. Feingold and Malnik allegedly used the information to net over $4 million in illicit profits trading the securities of at least seven different companies through their individual accounts and through brokerage accounts in the names of entities that they controlled.
The case originated from the SEC Market Abuse Unit's Analysis and Detection Center, which uses data analysis tools to detect suspicious patterns, such as improbably successful trading across different securities over time. Enhanced detection capabilities enabled SEC Enforcement staff to spot the unusual trading activities alleged in the SEC's complaint.
The SEC's complaint charges Feingold and Malnik with violations of the antifraud provisions of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. The complaint also names Adamas Healthcare Fund, Amiservice Development Limited, Bravo Business Limited, Kuray Investments Limited, Mignon Group Limited and Upbeat Worldwide Investments Limited, entities controlled by Feingold and/or Malnik, as relief defendants. The SEC seeks disgorgement of ill-gotten gains plus interest, penalties, and injunctive relief.
The SEC's investigation was conducted by Caitlyn M. Campbell, David Makol, John Rymas, and Assunta Vivolo, of the Market Abuse Unit, Michael Foster of the Chicago Regional Office and Rua Kelly of the Boston Regional Office, with assistance from Darren Boerner of the Market Abuse Unit, James D'Avino of the New York Regional Office, and Carlos Costa-Rodrigues, Marlee Miller and Matthew Greiner in the Office of International Affairs. This case has been supervised by Joseph G. Sansone, Chief of the Market Abuse Unit. The litigation will be led by Mr. Foster and Ms. Kelly.