A group of Boston golf buddies turned investors have been fined by the Securities and Exchange Commission for acting on insider information to make $554,000 in illegal profits (11 July 2014).
The SEC complaint filed in a Massachusetts federal court alleges Eric McPhail told his fairways pals about the likely stock performance of American Semiconductor Corporation as the 'investors' roamed the tees and greens.
The commission said McPhail had been told in confidence by a well placed executive of the energy firm who was also a member of the same country club about what was happening in his employer's boardroom.
McPhail chose to repeatedly share that confidential non public information with his plus four pals and they conspired to bet on the stock's price fluctuation in order to make money, the SEC say.
The SEC's director of the Boston regional office said, “Whether the tips are passed on the golf course, in a bar, or elsewhere, the SEC will continue to track down those who seek an unfair advantage trading stocks.
Working with our partners in law enforcement, we are sending a message to all investors that insider trading does not pay.”
A fuller account of the SEC charges can be viewed on the commission's website.