US Securities and Exchange Commission (SEC) has finally won a legal battle against a Florida man who was identified as an Insider Threat to Apple’s acquisition of mobile security company AuthenTec in 2012.
Further going into the details, a Florida man named John Stimpson bought AuthenTec call options in the year 2012 after learning nonpublic info that a possible merger of AuthenTec with Apple Inc, is on the cards. The guy’s idea was to sell the options for a higher stock price and to make incredible profits.
In an order dated Tuesday, the SEC said Stimpson sold his options within three months after Apple acquired AuthenTec for $256 million which caused AuthenTec’s share price rise by two-thirds.
As per the details available to the media, Stimpson, 49, of Melbourne Beach was working as a senior network administrator in the IT department of AuthenTec in 2012 and was holding the same post since November 2006. Through one of the board meetings, Stimpson learned that his company AuthenTec will be acquired by Apple by the 3Q of 2012.
So, John acquired most of the shares of his company in a bid to increase the stock price before the purchase deal. Apple discovered this discrepancy in early 2013 and reported to Merger and acquisition watchdog SEC as the deal was already concluded and was stalled for the fiscal year.
A detailed probe was established by SEC in which Stimpson’s insider trading charges were identified. On further prosecution, John Stimpson admitted that he will give up $135,570 of trading profits plus the interest of $7,663 and pay a $135,570 civil fine for his wrong doing.
As a result, Stimpson agreed to pay $278,773 in a 2-time settlement to US Securities and Exchange Commission by November this year.
Hence, SEC succeeded in not only identifying the insider threat of Apple’s purchase of AuthenTec deal but also managed to prosecute him and pay a penalty for breaching certain Merger and Acquisition laws of United States.