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April 14 — A New York-based research analyst was charged civilly and criminally late April 13 with trading on inside information that alternative investment manager Apollo Global Management was planning to acquire home security company ADT Corp.
Defendant John Afriyie allegedly learned about the deal when Apollo approached his investment firm, which wasn't identified, to discuss possible debt financing for the acquisition. He made $1.5 million trading on the inside information, the Securities and Exchange Commission and federal prosecutors said.
Afriyie allegedly accessed deal-related documents on his firm’s computer network, purchasing thousands of risky, out-of-the-money ADT call options in his mother’s brokerage account and selling them after the transaction was announced earlier this year. His mother, Lawrencia Afriyie, was named as a relief defendant in the SEC case.
“Insider traders should have learned by now that trying to hide their illegal activity in a relative’s account ultimately won’t work,” Jina L. Choi, director of the SEC’s San Francisco Regional Office, said in a release.
The SEC is seeking disgorgement plus prejudgment interest and civil penalties. In the criminal case, Afriyie was charged with one count of securities fraud, punishable by hefty fines and up to 20 years in prison. His lawyer in that case, public defender Amy Gallichio, declined to comment. No information was available regarding Afriyie's counsel in the civil action.
Both cases were filed in the U.S. District Court for the Southern District of New York
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To see the SEC complaint, go to http://www.bloomberglaw.com/public/document/Securities_and_Exchange_Commisison_v_Afriyie_et_al_Docket_No_116c. To see the criminal complaint, go to http://www.bloomberglaw.com/public/document/USA_v_Afriyie_Docket_No_116mj02423_SDNY_Apr_13_2016_Court_Docket.
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