SEC: Florida Man Accused of Insider Trading at SeaWorld
On April 9th, 2019, the Securities and Exchange Commission (SEC) announced insider trading charges against Paul B. Powers, a former associate general counsel at SeaWorld in Orlando, Florida. In a complaint filed in the United States District Court for the Middle District of Florida, the agency alleges that Mr. Bowers accessed non-public financial information and used it to trade for personal profits. Here, our Miami investment fraud lawyers provide an overview of the insider trading charges against this corporate insider.
Unlawful Trading Based on Insider Financial Information
According to the complaint from the SEC, SeaWorld saw significant declines in its corporate revenues beginning in 2013. By the end of 2017, the company’s stock lost more than 60 percent of its total market value. In the first quarter of 2018, revenue and attendance continued to falter. There was little to no improvement, nor did the company provide any positive guidance to investors. However, in the second quarter of 2018, SeaWorld suddenly saw a sharp, upward reversal in its attendance and overall earnings.
The Securities and Exchange Commission alleges that Paul Bannon Powers, who was then serving as an associate general counsel at that company, became privy to this information before it was released to the public. Before the positive financial results were published, Mr. Powers allegedly liquidated the full value of his brokerage account. He then used the $387,166 in proceeds to buy SeaWorld stock. Soon after, the financial information was released, and the stock rose by nearly 20 percent — netting Mr. Powers more than $60,000 in four days.
Sanctions Proposed By the SEC
To start, the SEC is seeking findings fact and conclusions of law against Mr. Powers. In addition, the agency is requesting the imposition of all sanctions deemed appropriate by the court. Among other things, this includes barring the defendant from engaging in similar transactions in the future, ordering him to disgorge ill-gotten gains, and requiring that he pay a civil monetary fine. Notably, the Department of Justice (DOJ) has also opened a criminal investigation against Paul Powers.
How Insider Trading Hurts Retail Investors
Insider trading can cause serious damage to ordinary investors. Not only does this type of conduct violate federal law, but it distorts securities prices and it hurts the integrity of public markets. The SEC has stated that it will continue to make insider trading a high enforcement priority. Investors should be able to trust that corporate officers, including high ranking attorneys, will act in a professional and fair manner.
Get Help From a Miami, FL Investment Fraud Attorney Today
At Carlson & Associates, P.A., our Florida securities fraud lawyers have many years of experience representing investors. If you sustained unfair losses, we are here to protect your legal rights and financial interests. To set up a fully confidential review of your investment fraud claim, please contact our law firm today. We represent in investors in Miami, Miami-Dade County, and throughout South Florida.
Resource:
sec.gov/litigation/complaints/2019/comp-pr2019-53.pdf
https://www.carlson-law.net/sec-awards-50-million-to-two-whistleblowers/