An investment advisor based in Wellington, Fla. has been charged with insider trading by the Securities and Exchange Commission. This is the second time Charles Rustin Holzer has faced insider trading charges related to trading in options of Dun & Bradstreet Corp, according to an Aug. 2 news release.
"We allege that Mr. Holzer is a serial insider trader whose conduct merits the stiffest penalties available to the Commission,” Gurbir Grewal, director of the SEC’s Division of Enforcement, said in the release. “In this case, a fine equal to three times his illicit trading profits sends a strong deterrent message not just to Mr. Holzer, but also to others who may contemplate engaging in such conduct.”
Holzer, "a family office executive and former broker," settled charges that he had traded DNB options based on inside information, the SEC said in the release. The recent charges allege Holzer also made illegal trades in DNB stock through offshore accounts he did not disclose to the SEC, violating the non-disclosure agreement he had in connection with the prior investigation and settlement.
The SEC complaint said Holzer received material nonpublic information Aug. 8, 2018, from an investment advisor on an impending DNB acquisition, the release reported. Holzer allegedly bought 23,000 shares of DNB stock based on this information, using offshore accounts connected to two Cayman Island-based entities he controlled, Maglione International Ltd. and Frontenac Investments Ltd. The unlawful trades resulted in profits of $391,308.
"Although those trades took place at roughly the same time as the options trades at issue in the prior lawsuit, according to the SEC’s complaint, Holzer did not disclose the offshore trading to the SEC," the release said.
The SEC's complaint charges Holzer with violating federal securities laws, and seeks injunctive relief, civil penalties and disgorgement of ill-gotten gains from the offshore entities Maglione and Frontenac, which are named as relief defendants.
Holzer, without admitting or denying the allegations, has agreed to settle the charges by consenting to a final judgment that permanently enjoins him from violating the relevant securities laws and requires him to pay a civil penalty of $1,173,926, the SEC reported. The entities, Maglione and Frontenac, have also agreed to settlements involving disgorgement and prejudgment interest. The proposed settlements are pending court approval.
The SEC's investigation was carried out by Derek Schoenmann and Elizabeth Baier of the New York Regional Office, under the supervision of Celeste Chase and Thomas Smith Jr., with assistance from the Financial Industry Regulatory Authority, the release said.
