Cutillo et al.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. lr-22721 / June 11, 2013

Securities and Exchange Commission v. Cutillo et al., Civil Action No. 09-CV-9208 (S.D.N.Y.) (RJS)

Former Trader Emanuel Goffer Settles SEC Insider Trading Charges

The Securities and Exchange Commission announced today that on June 7, 2013, The Honorable Richard J. Sullivan of the United States District Court for the Southern District of New York, entered a final judgment against Emanuel Goffer in SEC v. Cutillo et al., 09-CV-9208, an insider trading case the SEC filed on November 5, 2009. In its complaint, the SEC charged nine defendants, including Goffer, a former proprietary trader at the broker-dealer Spectrum Trading, LLC, with insider trading ahead of corporate acquisition announcements.

The SEC's complaint alleged that Zvi Goffer, Emanuel's brother, orchestrated this insider trading scheme in which an attorney with the law firm Ropes & Gray LLP misappropriated from the firm material, nonpublic information concerning potential corporate acquisitions, and tipped the inside information, through another attorney, to Zvi, in exchange for kickbacks. The complaint further alleged that Zvi tipped the information to a number of individuals, including his brother Emanuel. As alleged in the complaint, the tips related to potential acquisitions involving Ropes & Gray clients, including the acquisitions of Alliance Data Systems Corp., Avaya Inc. and 3Com Corp. As alleged in the complaint, Emanuel Goffer traded on the inside information he received from his brother, resulting in illicit profits of more than $1.3 million.

To settle the SEC's charges, Goffer consented to the entry of a final judgment that: (i) permanently enjoins him from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and (ii) orders disgorgement plus prejudgment interest of $1,546,021. The disgorgement obligation will be off-set in part by a forfeiture order in a related criminal case, and the remainder waived in light of his financial condition. In related administrative proceedings, Goffer also consented to the entry of an SEC order barring him from association with any broker, dealer, investment adviser, municipal securities dealer or transfer agent, and barring him from participating in any offering of a penny stock. In the related criminal case, Goffer was convicted of securities fraud and conspiracy to commit securities fraud, and was sentenced to three years in prison and ordered to forfeit $761,623. United States v. Emanuel Goffer, 10-CR-0056 (S.D.N.Y.).

For further information, see Litigation Releases 21283 and 21284 (Nov. 5, 2009), 21332 (Dec. 10, 2009), 21470 (Mar. 31, 2010), 21587 (July 7, 2010), 21741 (Nov. 15, 2010), 21826 (Jan. 26, 2011), 21999 (June 14, 2011), 22011 (June 21, 2011), 22021 (June 30, 2011), 22051 (July 20, 2011), 22056 (Aug. 2, 2011), 22078 (Aug. 31, 2011), 22135 (Oct. 20, 2011), 22186 (Dec. 9, 2011), 22250 (Feb. 2, 2012), 22297 (Mar. 19, 2012), 22299 (Mar. 20, 2012) and 22595 (Jan. 15, 2013).