INVESTMENT ADVISER PLEADS GUILTY TO INSIDER TRADING

The U.S. Attorney’s office for the Southern District of New York announced today that David Hobson, who served as an investment adviser in the Providence, Rhode Island, offices of two different national broker-dealer and investment advisers, pled guilty to engaging in a scheme to commit insider trading on deals involving pharmaceutical company Pfizer.

Breach of Duty

Per the release by the U.S. Attorney, Hobson participated in a scheme with his friend Michael Maciocio, who worked at Pfizer. Maciocio, while employed by Pfizer, regularly possessed material, nonpublic information about pending acquisitions and transactions under consideration. The U.S. Attorney asserted that over a period of several years, Maciocio breached his duty of confidentiality by providing inside information about potential acquisitions and transactions to Hobson. The indictment alleged that Hobson would then use this inside information to execute trades in favor of Maciocio, Hobson and other clients of Hobson.

Protecting the Fair Marketplace

In the press release, U.S. Attorney Preet Bharara stated: “As he admitted today, David Hobson exploited inside information provided by his friend and client Michael Maciocio to reap illegal profits for both of them. With Maciocio’s earlier guilty plea, both participants in this illegal insider trading scheme have now admitted to their crimes. Insider trading rigs the markets, and through prosecutions like this, we seek to make the securities markets fair.”

The U.S. Attorney stated in the release that as a result of the scheme, Hobson obtained more than $350,000 in ill-gotten gains for himself, Maciocio, and other clients of Hobson.

Per the release, Hobson pled guilty to one count of conspiracy to commit securities fraud, and to one count of securities fraud, while. Maciocio previously pled guilty on May 20, 2016, to one count of conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud, and two counts of securities fraud.

The case is U.S. v. Hobson, U.S. District Court, Southern District of New York, No. 16-cr-351

Jeff Petersen is an attorney licensed in California and Illinois representing clients in a wide variety of SEC investigations and SEC enforcement actions. He can be reached in California at 858.792.3666 and in Illinois at 312.450.4584.