SEC Knowingly Violated SEC Ethics Rules
The Securities and Exchange Commission (SEC) has charged a former staffer with securities fraud violations in connection with the trading of options and other securities. The employee, David R. Humphrey, worked at the SEC from 1998 to 2014.
According to the SEC’s complaint, Humphrey hid his personal trading from the Commission’s ethics office and misrepresented his trading activities when he was questioned later during an investigation.
In a press release, the SEC stated that Humphrey violated SEC ethics rules by engaging in transactions involving derivatives, while also failing to obtain pre-clearance before trading non-prohibited securities, and failing to hold securities for the required period.
As a result of the securities fraud violations, Humphrey has agreed to pay $51,917 in disgorgement of profits made in trading plus $4,774 in interest and a $51,917 penalty. He also has agreed to a permanent suspension from appearing and practicing before the SEC as an accountant. This includes not participating in audits or financial reporting of public companies.
Humphrey also has pled guilty to criminal charges related to false federal filings.
Understanding SEC Ethics Rules
All Securities and Exchange Commission (SEC) employees are subject to strict rules regarding securities transactions and specifically prohibit the trading of options or derivatives. The rules also explicitly state that all SEC staff are required to disclose securities holdings and transactions to the ethics office in annual filings. The purpose of the rules is to avoid using public office for private gain or even the appearance of it.
Call a Securities Fraud Attorney Today
If you are looking for a securities fraud attorney to review your rights and options, the lawyers at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerages firms for their wrongful actions.