Hingham man, dad to pay $209,000 to settle COVID test-related insider trading allegations

A Hingham man and his father, the former executive of a medical device company, have agreed to pay the federal government $209,000 to settle allegations of insider trading related to the sale of COVID-19 tests.

The Securities and Exchange Commission filed a lawsuit against Timothy Iberger, 38, of Hingham, and his father, Carl Iberger, 69, of Hamilton, on Friday. The SEC filed settlement agreements, which were approved by a judge, the same day.

As part of the settlement, the Ibergers neither admit nor deny that they conducted insider trading.

The SEC alleged in the lawsuit that Carl Iberger, the CFO of Connecticut-based medical devices company Precipio, tipped off his son that the company had signed an agreement to distribute COVID-19 test kits that were approved by the Food and Drug Administration. The deal had not been publicly announced.

His son then bought $31,250 worth of stock the day before the announcement, and the stock price shot up 400%, the SEC alleged in the lawsuit.

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The SEC alleged that Carl Iberger was texting his son as the deal was finalized, hinting that he should buy the stock, and then called his son to tell him to buy the stock before the announcement. The SEC also alleged that Carl Iberger transferred $2,700 to another person, unnamed in the lawsuit, to buy the stock before the announcement, but the unnamed person was only able to buy $540 worth of stock before the massive price increase, the SEC said in the lawsuit.

Timothy Iberger was well aware of insider trading rules because he worked for three years as a sales director at the Nasdaq stock exchange, where he received training on the law, the SEC said in the lawsuit.

As part of the settlement, Timothy Iberger agreed to pay the federal government $68,350, the net profits from what the SEC alleged was insider trading, as well as interest of $3,305. He also agreed to pay a fine of $68,350 for a total judgment of $140,005.

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Carl Iberger agreed to a $69,223 penalty. He is barred from serving as a director or officer of any companies that file reports or register securities with the SEC for five years as part of the settlement agreement.

He resigned from the company on March 21, the day before he signed the agreement with the SEC, according to a news release. In the release, the company did not mention the settlement over insider trading. Instead, it said Carl Iberger wanted to "spend more time with his family."

According to salary.com, Iberger made $431,936 in 2020, including a base pay of $216,025, a bonus of $75,000 and $129,360 in stock options. Public filings with the SEC put his base rate of pay at $200,000.

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Precipio did not respond to a request for comment and, as of Monday afternoon, Carl Iberger was still listed as the company's chief financial officer.

SEC spokesman Cory Jarvis said in an email that his agency would neither comment nor answer questions about the settlement. Timothy Iberger's attorney, Michael Bachner, said neither he nor his client had any comment on the settlement. Carl Iberger's attorney, Tucker DeVoe, said he had no comment.

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Reach reporter Wheeler Cowperthwaite at [email protected].