Securities Law Daily provides daily coverage of developments in the regulation of federal, state, and international securities and futures trading, with objective coverage of the...
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.
To contact the reporter on this story: Rob Tricchinelli in Washington at email@example.com
To contact the editor responsible for this story: Susan Jenkins at firstname.lastname@example.org
For the dismissal order, visit https://www.sec.gov/alj/aljdec/2015/id877jsp.pdf
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)