SEC Settles with Ex-Wall Street Professional for Insider Trading
Judge Katherine B. Forrest of the United States District Court in Manhattan, entered a final judgment against Alissa Joelle Kueng, the last-remaining defendant in an insider trading action involving tipping and trading prior to an announcement that Jamdat Mobile Inc., a software company that designed games for cell phones, would be acquired by Electronic Arts, Inc.
The final judgment orders her to pay a $25,000 civil penalty. Kueng consented to the entry of the final judgment, without admitting or denying the allegations against her in the complaint.
The Commission’s civil complaint, filed in October 2009, alleged that Kueng, a former sales specialist at J.P. Morgan Securities Inc., in December 2005, had conveyed to a J.P. Morgan trader and two institutional customers, highly specific material, nonpublic information regarding Jamdat’s impending acquisition by Electronic Arts that she had received from a friend in the securities brokerage industry. The trader and the institutional customers invested in Jamdat stock on the basis of that information and realized profits totaling approximately $350,000.
The Commission further asserted that given the specificity of the information Kueng had received, which included the price per share and the timing of the acquisition, she knew or should have known that the information had been obtained in breach of a duty to Jamdat. Also, in October 2009, the Commission filed a civil action in federal district court in Northern California charging four other defendants, including a Jamdat insider, with insider trading for tipping and/or trading on the basis ofmaterial, nonpublic information regarding Jamdat. Those defendants settled the charges against them.
Kueng also has agreed to the issuance of an administrative order, based on the entry of the permanent injunction against her, barring her from association with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, with a right to reapply for association in a non-supervisory capacity after ten years and barring her from participating in the offering of a penny stock, with the right to apply for re-entry after ten years.