Two financial advisors and three others were charged with insider trading for more than $1.8 million in illicit profits based on confidential information about a Philadelphia-based insurance holding company’s merger negotiations with a Japanese firm. The two financial advisors, who are registered representatives at Ameriprise Financial Services, illegally traded in the stock of Philadelphia Consolidated Holding Corp. (PHLY) based on nonpublic information about the company’s impending merger with Tokio Marine Holdings. They obtained the inside information from a senior executive who was confiding in him through their relationship at Alcoholics Anonymous (AA) about pressures he was facing at work. The PHLY stock was then purchased in advance of the merger announcement on July 23, 2008. They made a $292,128 profit when the stock price jumped 64 percent that day.
The two advisors agreed to settle the SEC’s charges and pay approximately $1.2 million and $140,000 respectively.
SEC Charges Five With Insider Trading on Confidential Merger Negotiations Between Philadelphia Company and Japanese Firm