U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25805 / August 7, 2023
Securities and Exchange Commission v. Charles Rustin Holzer et al., No. 23 Civ. 6753 (S.D.N.Y. filed Aug. 2, 2023)
Final Judgment Entered Against Florida Investment Adviser Charged a Second Time for Insider Trading
The Securities and Exchange Commission has obtained a final consent judgment against Charles Rustin Holzer, a family office executive and former broker charged with insider trading in stock of Dun & Bradstreet Corp. (DNB). Final consent judgments were also entered against two offshore entities named as relief defendants in the SEC's complaint.
According to the SEC's complaint, nine days before an August 8, 2018, acquisition announcement, Holzer, of Wellington, Florida, learned material nonpublic information about the prospective DNB acquisition from an investment adviser pursuant to a non-disclosure agreement that prohibited him from disclosing or trading on the information. The SEC alleged that Holzer used that information to purchase 23,000 shares of DNB stock in offshore accounts belonging to two Cayman Islands-based entities that Holzer directly or indirectly controlled, Maglione International Ltd. and Frontenac Investments Ltd., resulting in $391,308 in ill-gotten profits. Although those trades took place at roughly the same time as trades in DNB options that were the subject of a prior investigation and settled lawsuit against Holzer, according to the SEC's complaint filed August 2, 2023, Holzer did not disclose the offshore trading to the SEC in connection with that earlier lawsuit.
On August 4, 2023, the U.S. District Court for the Southern District of New York entered a final judgment against Holzer, permanently enjoining him from violating the antifraud provisions of the Securities Exchange Act of 1934 and ordering him to pay a civil penalty of $1,173,926. The same day, the Court also entered final judgments against Maglione and Frontenac, ordering that they pay disgorgement of $331,389 and $59,920, respectively, representing the amount of profits from Holzer's DNB trading in their respective accounts, plus prejudgment interest of $84,032 (for Maglione) and $15,194 (for Frontenac).
The SEC's investigation was conducted by Derek Schoenmann and Elizabeth Baier of the New York Regional Office. The investigation was supervised by Celeste Chase and Thomas P. Smith, Jr. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.