Litigation: SEC Obtains Final Judgment Against Ex-Company Controller Charged With Insider Trading

WASHINGTON, April 14 -- The Securities and Exchange Commission issued the following litigation release (No. 19-CV-06187; C.D. Cal. filed July 18, 2019) involving Mark Loman:

The Securities and Exchange Commission announced today the entry of a final judgment on April 11, 2022 against Mark Loman, formerly controller of OSI Systems, Inc., a California-based security, electronics, and healthcare manufacturing company. Loman agreed to pay $482,050 to settle the charges that he secretly used confidential information he obtained in his position to unlawfully trade securities.

The SEC's complaint, filed in federal court in Los Angeles, California on July 19, 2019, alleged that Mark Loman, the former Controller and Vice President of Finance of OSI, knew that the company was going to fall far short of its revenue and earnings expectations in the last quarter of 2015, and just days before the end of the quarter, Loman made options trades betting that OSI's stock would go down in price. The complaint further alleged that when OSI publicly announced its disappointing quarterly financial results, its stock dropped approximately 35%, netting Loman more than $300,000 on the options trades. As alleged, Loman further profited from the misuse of nonpublic information by purchasing stock in a target company after he learned that OSI was in negotiations to acquire the target at a premium over its market price. According to the complaint, when OSI's intended acquisition was announced publicly, Loman immediately sold his shares, netting more than $100,000.

In a parallel criminal action filed November 21, 2019 by the United States Attorney's Office for the Central District of California, a jury found Loman guilty of four counts of securities fraud and four counts of insider trading. Loman was sentenced to 35 months in prison and ordered to pay a $600,000 fine.

In the SEC's action, Loman consented to the entry of a final judgment permanently enjoining him from violating the antifraud provisions of Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, permanently barring him from serving as an officer or director of a public company, and ordering him to pay a civil penalty of $482.050.

Loman has also agreed to settle an administrative proceeding pursuant to Rule 102(e) of the Commission's Rules of Practice, barring him from appearing or practicing before the Commission as an accountant.

The SEC's litigation against Loman was conducted by Sheila O'Callaghan, John Han and Ruth Hawley of the SEC's San Francisco Regional Office. The SEC's investigation was conducted by Ruth Hawley and supervised by Jeremy Pendrey and Monique C. Winkler of the San Francisco Regional Office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.