SEC Obtains Final Judgment Against Former Pharmacy Chain Employee Charged with Insider Trading
Litigation Release No. 25428 / June 21, 2022
Securities and Exchange Commission v. Steven J. Sheinfeld, No. 1:20-cv-01692 (M.D. Pa. filed September 17, 2020)
On June 17, 2022, the U.S. District Court for the Middle District of Pennsylvania entered a final consent judgment against now former Rite Aid Corp. employee Steven J. Sheinfeld, who was charged with insider trading based on nonpublic information regarding a potential merger between Walgreens Boots Alliance, Inc. and Rite Aid.
On September 17, 2020, the Commission filed a complaint alleging that Sheinfeld sold nearly $1 million in Rite Aid securities in advance of news that caused the price of Rite Aid securities to drop when it became public. The complaint alleges that, after learning confidentially through his employment that the anticipated merger between Rite Aid and Walgreens would not close by an upcoming deadline, Sheinfeld liquidated all of his exercisable Rite Aid employee stock options. The complaint further alleges that Sheinfeld then accessed the accounts of his sister-in-law and adult daughter and sold all of their Rite Aid stock as well.
The final consent judgment against Sheinfeld permanently enjoins him from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and orders him to pay a civil penalty in the amount of $305,129.
The SEC's investigation was conducted by Megan Ryan and supervised by Julia C. Green and Scott A. Thompson, of the SEC's Philadelphia Regional Office. John V. Donnelly, Jennifer C. Barry, and Greg Bockin led the SEC's litigation.