The SEC charged Stephen B. Gray, the former CEO of Houston-based investor relations firm Dennard Lascar Associates, with insider trading last week.
In its complaint, the SEC alleges that Gray obtained confidential information about numerous companies while the company he was in charge of helped the firms to draft and publish press releases related to earnings and other major developments.
The SEC also alleges that Gray used the information to profit and avoid losses of more than $313,000 over the course of 13 months. Gray was fired in October after the firm learned about the SEC investigation into the matter.
“As head of an investor relations firm that helped clients prepare announcements of material events, Gray had unique access to extremely sensitive and confidential information before the rest of the world received it,” David Woodcock, the director of the SEC’s Fort Worth regional office, said. “Gray boldly abused his position for the sake of illegal insider trading profits.”
Gray allegedly traded illegally in the securities of at least six client companies. He also asked client employees about transactions or announcements before they were made public, even meeting with them privately on occasion.
“Gray not only knew the firm’s policies that prohibited employees from trading on confidential information gleaned from clients – he authored them,” David Peavler, the associate director of the SEC’s Fort Worth office, said. “While Gray was personally requiring firm employees to sign copies of the policies he wrote, he was insider trading himself.”