The SEC charged a former sales executive, his business partner, and six individuals with insider trading ahead of an announcement that Life Time Fitness, Inc. was going to be acquired.
In the Complaint, the SEC alleged that Shane P. Fleming tipped his business partner, Bret J. Beshey, about ongoing discussions on the sale of Life Time Fitness, Inc. The SEC asserted that Mr. Beshey tipped two other individuals, who then allegedly tipped an additional four individuals. The traders allegedly sold certain options and shares in the company for collective profits of $866,209 after the news of the acquisition was reported to the public. The SEC stated that the executives acted with the expectation of receiving kickbacks and that at least a portion of the illicit profits were shared. As a result of the misconduct, the SEC charged the defendants with violating Exchange Act Section 10(b) and Rule 10b-5.
The SEC is seeking redress in the form of monetary penalties, disgorgement, and interest. In a parallel action, the U.S. Attorney's Office for the Northern District of Illinois filed criminal charges against all of the individuals.
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