The SEC agreed to settle charges with a former hedge fund analyst accused of trading on nonpublic information (see previous coverage).
In a Complaint filed in May 2017, the SEC alleged that Jordan Fogel traded on nonpublic information communicated to him by a "political intelligence consultant" about plans to cut Medicare reimbursement rates. Reportedly, the consultant received the confidential information from a former colleague employed at the Centers for Medicare and Medicaid Services. Mr. Fogel agreed to cooperate with the SEC's litigation against the remaining defendants. The Court for the Southern District of New York will determine any potential interest, disgorgement or penalties.
Mr. Fogel now has resolved the SEC's civil claims and the DOJ's criminal charges against him. In May 2017, Mr. Fogel pleaded guilty to charges of insider trading, wire fraud and other crimes filed by the U.S. Attorney's Office for the Southern District of New York.
Commentary / Joseph Facciponti
This case shows that those who use "political intelligence consultants" to obtain information for trading purposes expose themselves to similar risks as those who use "expert networks." Just as trading on material nonpublic corporate information can lead to potential civil and criminal charges, so can trading based on nonpublic information obtained from government sources.
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