SEC Charges Mother and Son with Insider Trading
Litigation Release No. 25268 / November 23, 2021
Securities and Exchange Commission v. Carol E. Cohen and Austin Rotter,
No. 1:21-cv-09580 (S.D.N.Y filed, November 18, 2021)
The Securities and Exchange Commission charged New Jersey residents Carol E. Cohen and her son, Austin Rotter, with insider trading in the stock of The Trade Desk, Inc. Cohen and Rotter have agreed to pay more than $136,000 in penalties, subject to court approval.
The SEC's complaint alleges that Cohen, a retired school teacher, purchased shares of The Trade Desk on the basis of material, non-public information she obtained from her son in advance of the company's positive second-quarter earnings report. Rotter allegedly obtained The Trade Desk's advance earnings information in the summer of 2018 through his job at an outside public relations firm for The Trade Desk. According to the complaint, Rotter violated confidentiality agreements that prohibited him from using or disclosing The Trade Desk's financial information and made a series of phone calls to his mother prior to the announcement. Cohen allegedly purchased $86,000 worth of shares of The Trade Desk following the phone calls with her son and sold them shortly after the company's share price increased 37% following the public announcement of the earnings results, netting $45,646.03 in illicit profits.
The SEC's complaint, filed in federal court in Manhattan, charges Cohen and Rotter with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the complaint's allegations, Cohen and Rotter agreed to the entry of a final judgment that would enjoin them from violations of the charged provisions and would impose civil penalties of $91,292.06 against Cohen, and of $45,646.03 against Rotter. The proposed settlement is subject to court approval.
The SEC's investigation was conducted by Teresa A. Rodriguez, William T. Conway III, James D'Avino, Pascale Guerrier and Wendy B. Tepperman, and was supervised by Lara Shalov Mehraban, all of the New York Regional Office.