Initiated By
UNITED STATES SECURITIES AND EXCHANGE COMMISSION (SEC)
Allegations
SEC LITIGATION RELEASE NO. 20019, ACCOUNTING AND AUDITING ENFORCEMENT RELEASE NO. 2565, FEBRUARY 26, 2007; THE SEC FILED CIVIL INJUNCTIVE ACTIONS AGAINST THE FORMER PRESIDENT OF BUSINESS DEVELOPMENT OF A COMPANY (THE "COMPANY") AND HIS FRIEND AND FORMER BROKER, MATTHEW E. KOPSKY, FOR INSIDER TRADING IN THE SECURITIES OF THE COMPANY. THE SEC ALLEGED THE DEFENDANT VIOLATED SECTION 10(B) OF THE EXCHANGE ACT AND RULE L0B-5 THEREUNDER. ACCORDING TO THE COMPLAINT, IN EACH OF ITS FIRST THREE QUARTERLY EARNINGS ANNOUNCEMENTS OF 2003, THE COMPANY ANNOUNCED EARNINGS THAT BEAT ANALYSTS' ESTIMATES AND RAISED ITS EARNINGS GUIDANCE ABOVE ANALYSTS' ESTIMATES, RESULTING IN MORE THAN A 10% INCREASE IN THE STOCK PRICE ON THE DAY OF EACH ANNOUNCEMENT. THE COMPLAINT ALLEGES THAT KOPSKY WAS TIPPED BEFORE EACH ANNOUNCEMENT. KOPSKY PURCHASED THE COMPANY'S SECURITIES FOR HIMSELF, FAMILY MEMBERS, AND/OR HIS CLIENTS. ACCORDING TO THE COMPLAINT, KOPSKY EARNED AN AGGREGATE PROFIT OF $276,259, INCLUDING $107,062 FOR HIMSELF AND HIS WIFE, AND $169,197 FOR HIS CLIENTS. AT ALL RELEVANT TIMES, KOPSKY KNEW OR SHOULD HAVE KNOWN THAT THE INFORMATION CONVEYED TO HIM REGARDING THE COMPANY'S QUARTERLY EARNINGS, EARNINGS GUIDANCE AND UNANNOUNCED ACQUISITIONS WAS IMPROPERLY OBTAINED AND NONPUBLIC. WHILE IN POSSESSION OF THIS MATERIAL, NONPUBLIC INFORMATION, KOPSKY PURCHASED THE COMPANY'S SECURITIES, FOR HIMSELF, HIS WIFE AND HIS CLIENTS, AND RECOMMENDED THE PURCHASE OF THE COMPANY'S SECURITIES TO FAMILY, FRIENDS, CLIENTS AND OTHERS ON THE BASIS OF THAT INFORMATION.
Resolution
Consent
Sanctions
Monetary/Fine
Amount
$276,259.00
Sanctions
Disgorgement/Restitution
Sanctions
Cease and Desist/Injunction
Sanction Details
SEC LITIGATION RELEASE 20915, FEBRUARY 26, 2009: ON FEBRUARY 24, 2009, THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MISSOURI ENTERED A FINAL JUDGMENT BY CONSENT AGAINST DEFENDANTS MATTHEW E. KOPSKY RESOLVING CHARGES OF INSIDER TRADING. THE COURT'S JUDGMENT ENJOINED KOPSKY FROM FUTURE VIOLATIONS OF SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER, AND ORDERED KOPSKY TO PAY $381,590 IN DISGORGEMENT AND PREJUDGMENT INTEREST, AND A CIVIL PENALTY OF $276,259. KOPSKY SETTLED THE COMMISSION'S CLAIMS WITHOUT ADMITTING OR DENYING THE ALLEGATIONS OF THE COMPLAINT.
Broker Comment
MR. KOPSKY WAS ACCUSED OF RECEIVING AND TRADING ON INSIDE INFORMATION BY THE SEC IN 2007. WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, MR. KOPSKY VOLUNTARILY SETTLED THE MATTER IN 2009, WHEREUPON HE PAID FINES DESCRIBED ABOVE AND COMPLIED WITH A ONE YEAR SUSPENSION AGREED TO WITH THE SEC WHICH ENDED ON MARCH 23, 2010.