An Idaho executive pleaded guilty to insider trading based on material non-public information about an impending corporate acquisition.
According to court documents, Michael Smith, 48, of Eagle, Idaho, served as the president and Chief Operating Officer of a company (name withheld) since in or around June 2022.
The company was based in Idaho, and its shares were publicly traded on NASDAQ.
By at least June 2024, by virtue of his position at the company, Smith received material non-public information regarding the impending acquisition of the company by another company.
Smith was subject to the company’s Insider Trading Policy, which, among other things, prohibited employees from trading in the company’s stock if they possessed MNPI.
On July 26, 2024, Smith bought the company stock using a brokerage account belonging to an individual. Smith and the individual had a close personal relationship.
Smith executed these trades based on MNPI regarding the impending acquisition of the company, despite knowing that he was prohibited from trading the company’s stock.
On August 7, 2024, news of the company’s acquisition became public, and the company’s stock increased by nearly 50%.
The next day, Smith sold the company stock he had purchased for the individual for a profit of approximately $145,754.69.
Smith executed the trades to benefit the individual financially.
Smith pleaded guilty to one count of securities fraud. He faces a maximum penalty of 20 years in prison.
