SEC FILES SETTLED INSIDER TRADING CASE INVOLVING RELATIVES

The Commission filed a settled insider trading case which is based on the misappropriation of inside information by one relative from another. SEC v. Haim, Civil Action No. 11-cv-295 (D.N.Y. Filed May 24, 2011). Defendant Abraham Haim is a self-employed technology consultant who resides in New Jersey. Mr. Haim had a close relationship with a relative who worked at an international investment bank. Like Mr. Haim the relative resided in New Jersey.

The banker frequently worked at home where he maintained an office. Mr. Haim made periodic visits to the banker’s home. During those visits he listened in on the banker’s conversations without the consent or knowledge of his relative. He also secretly read confidential business documents that belonged to the banker without permission.

Between April 2006 and March 2007 the relative banker worked on transactions involving Intergraph Corporation, Metasolo Inc., Open Solutions, Inc., Aeroflex Inc. and MapInfo Corporation. Prior to each deal announcement Mr. Haim misappropriated inside information about the pending transaction that he obtained by listening in on the banker’s confidential telephone conversations or reading non-public business documents. In each instance he traded in advance of the public announcement of the transaction. As a result he had trading profits of $30,126.00.

To settle the case Mr. Haim consented to the entry of a permanent injunction prohibiting future violations of Exchange Act Section 10(b). In addition, he agreed to disgorge his trading profits along with prejudgment interest and to pay a civil penalty equal to the amount of the trading profits.