The Securities and Exchange Commission yesterday filed insider trading charges against two former executives of PetMed Express Inc., a publicly-traded online pet pharmacy based in Florida.

The SEC's complaint alleges that Richard M. Kirsch, PetMed's former Director of Information Systems, and Adam Terris, PetMed's former Director of Call Center and Pharmaceutical Operations, both Davie, Florida residents, profited from trading in the securities of PetMed on the basis of confidential information obtained in their senior roles with the company. As alleged in the SEC's complaint, from December 29, 2014 to January 18, 2018, Kirsch traded common stock and call options in advance of seven PetMed market-moving earnings announcements after learning information concerning the company's quarterly and year-end financial results, for realized profits and avoided losses of $164,966. According to the SEC's complaint, Kirsch also routinely purchased PetMed securities during blackout periods when PetMed's internal policies prohibited all trading in the company's securities. The SEC further alleges that in March 2017, Kirsch purchased PetMed call options using money Terris provided for trading while both were in possession of information concerning PetMed's quarterly and year-end financial results. As further alleged, Kirsch sold the call options days after the company's earnings announcement, and gave Terris all of the realized profits of $727,400.

The SEC's complaint, filed in the U.S. District Court for the Southern District of Florida, alleges that Kirsch and Davis violated the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the allegations, Kirsch and Terris consented to permanent injunctions prohibiting them from violating these provisions and to five-year officer-and-director bars. Kirsch agreed to pay a $1,057,392 penalty and Terris agreed to pay a $1,454,800 penalty.

The SEC's investigation was conducted by Jordan A. Cortez and supervised by Jessica M. Weissman and Glenn S. Gordon, with the assistance of trial counsel Robert K. Levenson. The SEC thanks the Financial Industry Regulatory Authority for its assistance in this matter.