Litigation: SEC Charges Stockbroker, Friend With Insider Trading

WASHINGTON, July 1 -- The Securities and Exchange Commission issued the following litigation release (No. 23-civ-05573; S.D.N.Y. filed June 29, 2023) involving Jordan Meadow and Steven Teixeira:

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On June 29, 2023, the Securities and Exchange Commission filed insider trading charges against Jordan Meadow, a registered representative for a New York-based broker-dealer, and Steven Teixeira, the Chief Compliance Officer of an international payment processing company, in connection with their trading based on material nonpublic information that Teixeira obtained from his girlfriend's laptop while she was working at home during the COVID-19 pandemic.

The SEC's complaint alleges that Teixeira accessed nonpublic information on possible upcoming mergers and acquisitions of public companies from the laptop of his girlfriend, who was employed at a prominent New York-based investment bank. As alleged, Teixeira then used the information to purchase call options on several issuers ahead of the announcement of the deals and tipped the information to his friends, including Meadow, so that they could trade as well. The scheme allegedly generated illicit profits of approximately $28,600 for Teixeira, while Meadow made more than $730,000. Additionally, according to the complaint, Meadow recommended trades to his brokerage customers based on the material nonpublic information from Teixeira, resulting in millions of dollars in profits for them and hundreds of thousands of dollars in commissions for Meadow.

The SEC's complaint, filed in federal court in Manhattan, charges Teixeira, of New York, and Meadow, of New Jersey, with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and seeks permanent injunctive relief, disgorgement with prejudgment interest, civil penalties, and bars on Meadow and Teixeira serving as officers or directors of public companies.

In a parallel action, the U.S. Attorney's Office for the Southern District of New York announced criminal charges against Meadow and Teixeira.

The SEC's ongoing investigation is being conducted by Norman P. Ostrove and Julia C. Green of the Enforcement Division's Market Abuse Unit, with assistance from John S. Rymas of the Market Abuse Unit's Analysis and Detection Center. It has been supervised by Scott A. Thompson and Nicholas P. Grippo of the Philadelphia Regional Office and Joseph G. Sansone, Chief of the Market Abuse Unit. The litigation will be led by Spencer Willig and Gregory Bockin of the Philadelphia Regional Office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority, the Federal Bureau of Investigation, and the U.S. Attorney's Office for the Southern District of New York.

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Original text here: https://www.sec.gov/litigation/litreleases/2023/lr25765.htm