SEC In-House Judge Tosses Insider Trading Case

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By Rob Tricchinelli

Sept. 14 — An SEC in-house judge dismissed insider trading charges against a former Wells Fargo Securities LLC trader Sept. 14, holding that the trader didn't receive the information in exchange for a personal benefit.

The Securities and Exchange Commission argued that trader Joseph Ruggieri was tipped off by a Wells Fargo research analyst, Gregory Bolan Jr., to upcoming rating changes on six stocks and that he profited by trading on the advanced knowledge.

The SEC didn't sufficiently prove that Bolan received a personal benefit by tipping Ruggieri, Administrative Law Judge Jason Patil ruled, handing the agency a rare loss in its in-house administrative proceedings.

The SEC did prove that trades were made on four of the six stocks, but Patil held that the agency didn't meet its burden under the Second Circuit's Newman case. In that December 2014 case, two insider trading convictions were vacated because the government didn't prove that remote tippee defendants knew their information was passed on by an insider for a personal benefit.


The SEC argued that “Ruggieri provided several benefits to Bolan in exchange for the tips: career mentorship and positive feedback that would potentially increase Bolan’s annual bonus and improve Bolan’s chances of promotion,” as well as furthering a friendship.

Patil ruled that the feedback was genuine, not in exchange for information, and that Bolan and Ruggieri's friendship was “not a meaningful, close, or personal one.”

Bolan also didn't testify, which the judge said could have improved the SEC's ability to meet its burden of proof. Bolan had previously settled related charges against him and agreed to a $75,000 penalty.

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To contact the editor responsible for this story: Susan Jenkins at

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