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Published by Morris, Manning & Martin, LLP
U.S. Court Rejects Insider Trading Charges against Schvacho; “Total Vindication” for MMM Client Who Faced Unfounded SEC Allegations.
Recently, the U.S. District Court for the Northern District of Georgia this week ruled in favor of defendant, Larry Schvacho, in a case that may have precedent-setting implications for future insider trading charges leveled by the SEC. The case was originally filed in July 2012 and has finally reached a resolution when Judge William Duffey Jr. ruled against the SEC in what he describes as the SEC’s “overreaching, self-serving interpretation” of evidence.
The SEC alleged that Mr. Schvacho made more than $500,000 dollars in improper profit from trading stock in Comsys IT Partners before a merger announcement in February 2010. The SEC believed that Mr. Schvacho had learned of the upcoming transaction from a close friend, then-Comsys CEO Larry Enterline. Upon examination of testimony, the Court established that the SEC had provided evidence that was insufficient to prove that insider trading had in fact occurred.
When vindicated by the Court’s decision, Mr Schvacho stated, “My experience demonstrates serious flaws in the way the SEC approaches some of these highly-questionable cases. They have the use of virtually unlimited taxpayer money, and if they lose there are no negative consequences — there’s zero accountability on the part of the SEC. Consequently the SEC has no incentive for fair treatment.” For full details on the article, please click here.
What do you think about the SEC and insider trading cases?