SEC Charges Insider with Illegal Trading in Advance of Partnership Announcement

ADMINISTRATIVE PROCEEDING
File No. 3-22213

September 27, 2024 - The Securities and Exchange Commission today announced settled charges against Austin Kauh of Wilton, CT for insider trading in advance of the December 2021 announcement (the “Announcement”) that Kauh’s employer, Chewy, Inc. (“Chewy”), had entered into a strategic partnership with Trupanion, Inc. (“Trupanion”).

According to the SEC’s order, during the period leading up to the Announcement, Kauh was part of Chewy’s due diligence team, and, in this role, he learned about plans for a partnership that would allow Trupanion to offer an exclusive suite of pet health insurance and wellness plans to more than 20 million Chewy customers.  Between June 10, 2021 and August 25, 2021, in violation of his duties to his employer, Kauh purchased Trupanion stock using this material nonpublic information.  Kauh conducted this trading in his personal account and in an account held in the name of another person.  When Trupanion’s stock price rose by approximately 39% following the Announcement, Kauh generated ill-gotten gains of $4,344 in his personal account and $12,093 in the other account. 

The SEC’s order finds that Kauh violated the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.  Without admitting or denying the SEC’s findings, Kauh consented to the issuance of a cease-and-desist order and a five-year bar from acting as an officer or director of a public company, and agreed to pay disgorgement of $4,344, prejudgment interest of $634.79, and a civil penalty of $30,297.14.

The SEC’s investigation was conducted by Jawad B. Muaddi, Joshua R. Geller, and Assunta Vivolo of the Enforcement Division’s Market Abuse Unit and Melissa Coppola of the New York Regional Office.  This matter was supervised by Market Abuse Unit Chief Joseph G. Sansone.  The SEC appreciates the assistance of the Financial Industry Regulatory Authority.