SEC Charges Former Attorney at U.S.-Based Global Law Firm with Insider Trading
Visiting attorney at the Washington, D.C. office of law firm used access to confidential client info to make illegal profits
FOR IMMEDIATE RELEASE
Washington D.C., Aug. 23, 2023 —
The Securities and Exchange Commission today announced insider trading charges against Romero Cabral da Costa Neto for trading based on material, nonpublic information concerning a client of the global law firm where he worked as a visiting attorney from Brazil.
According to the SEC’s complaint, in 2023, during Costa’s one-year term of employment as a visiting attorney at the law firm, he accessed confidential information about the law firm’s work on the biopharmaceutical company Swedish Orphan Biovitrum AB’s acquisition of CTI BioPharma Corp. (CTIC). The complaint alleges that, on May 9, 2023, the day before the deal was publicly announced, Costa purchased more than 10,000 shares of CTIC. He then allegedly sold those shares in violation of securities laws and the firm’s policies, including its policy against insider trading, on the day of the announcement, realizing a profit of more than $42,000. In addition to CTIC, Costa traded in the securities of several other issuers represented by the law firm, close in time to material announcements by those companies.
“As alleged in our complaint, Costa violated his duties to the law firm and its clients when he abused his position to enrich himself,” said Nicholas P. Grippo, Regional Director of the Philadelphia Regional Office. “Lawyers often have access to sensitive and confidential information about their law firms’ public company clients. When lawyers abuse that access, as Costa allegedly did here, we will promptly take action to hold them accountable. In this case, thanks to the quick work of the SEC’s staff, we were able to act within months of Costa’s alleged insider trading to ensure that he will be held accountable.”
This case originated from the SEC’s Market Abuse Unit’s Analysis and Detection Center, which uses data analysis tools to detect suspicious trading patterns. The SEC referred the matter to the U.S. Attorney's Office for the District of Columbia, which today announced parallel criminal charges against Costa.
The SEC’s complaint, filed in U.S. District Court for the District of Columbia, charges Costa with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and seeks injunctive relief, disgorgement with prejudgment interest, and civil penalties.
The SEC’s ongoing investigation is being conducted by Scott A. Thompson and Mr. Grippo of the Philadelphia Regional Office, with the assistance of John Rymas of the Market Abuse Unit’s Analysis and Detection Center. The SEC's litigation will be conducted by Kara Sweet and Gregory R. Bockin. The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Columbia and the FBI. The law firm is cooperating with the SEC’s investigation.