The Securities and Exchange Commission yesterday charged Kevin Van de Grift and Gil Friedman with insider trading ahead of the April 9, 2018 public announcement that private equity firm Francisco Partners Management, L.P. agreed to acquire payment systems company Verifone Systems, Inc.

According to the SEC's complaint, filed in federal district court in New York, Friedman - a former Francisco Partners consultant - tipped his close friend, Van de Grift - a day-trader and licensed accountant - with material, nonpublic information concerning Francisco Partners' potential acquisition of Verifone. The SEC alleges that based on Friedman's tip, Van de Grift purchased 60,000 shares of Verifone stock from March 5, 2018 through March 9, 2018, and subsequently sold all of these shares the day after the acquisition announcement for a profit of approximately $300,000.

The SEC's complaint charges Van de Grift and Friedman with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctions, civil penalties, and officer-and-director bars as to both defendants. The complaint also seeks disgorgement with prejudgment interest against Van de Grift.

The SEC's investigation was conducted by Michael Cates, with assistance from Daniel Konosky, and was supervised by Ian Karpel, Nicholas Heinke, and Jason Burt. The SEC's litigation will be led by Sharan Lieberman and Mr. Cates and supervised by Gregory Kasper, Mr. Heinke, and Mr. Burt. The SEC acknowledges the assistance and cooperation of the Financial Industry Regulatory Authority.