The U.S. Securities and Exchange Commission recently brought insider trading charges against Romero Cabral da Costa Neto, who allegedly engaged in trading activities based on confidential information during his tenure as a visiting attorney at a global law firm, according to an Aug. 23 news release.
“As alleged in our complaint, Costa violated his duties to the law firm and its clients when he abused his position to enrich himself,” Nicholas P. Grippo, regional director of the Philadelphia office, said in the release. “Lawyers often have access to sensitive and confidential information about their law firms’ public company clients. When lawyers abuse that access, as Costa allegedly did here, we will promptly take action to hold them accountable. In this case, thanks to the quick work of the SEC’s staff, we were able to act within months of Costa’s alleged insider trading to ensure that he will be held accountable.”
The SEC's complaint asserts that, in 2023, Costa gained access to privileged information regarding the law firm's involvement in the acquisition of CTI BioPharma Corp. by the biopharmaceutical company Swedish Orphan Biovitrum AB (Sobi), the release reported.
The complaint states Costa purchased more than 10,000 shares of CTIC May 9. He subsequently sold these shares the day of thebig announcement, allegedly violating securities laws and the firm's policies against insider trading. This trading reportedly led to a profit exceeding $42,000, the release said.
Additionally, Costa engaged in trading activities involving other companies represented by the law firm, closely timed with their significant announcements, according to the release.
The complaint filed by the SEC in the U.S. District Court for the District of Columbia accuses Costa of contravening the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934, along with Rule 10b-5. Seeking injunctive relief, disgorgement with prejudgment interest and civil penalties, the SEC aims to address the alleged misconduct, the release reported.
The SEC's case originates from its Market Abuse Unit's Analysis and Detection Center, which employs data analysis tools to identify potentially suspicious trading patterns. The matter was subsequently referred to the U.S. Attorney's Office for the District of Columbia, resulting in parallel criminal charges against Costa, the release said.
The SEC's investigation is ongoing and is being conducted by Scott A. Thompson and Grippo, with assistance from John Rymas of the Market Abuse Unit's Analysis and Detection Center. Legal proceedings will be led by Kara Sweet and Gregory R. Bockin, according to the release.
The collaboration and support of the U.S. Attorney's Office for the District of Columbia and the FBI are acknowledged. Furthermore, the law firm involved is cooperating with the SEC's investigation, signaling a collaborative approach toward addressing the alleged misconduct, the release said.
