US Securities and Exchange Commission - VALIC

SEC Charges Nevada Man Who Traded on Confidential Information Taken From Lifelong Friend

SECWashington D.C., May 7, 2019 — The Securities and Exchange Commission today announced settled insider trading charges against a Nevada man who obtained confidential information about a pending corporate merger from a lifelong friend and used it to generate more than $250,000 in illicit trading profits.

According to the SEC’s complaint, while Brian Fettner was a guest in the home of a longtime friend who was also the general counsel of Cintas Corporation, Fettner surreptiously viewed documents contemplating an acquisition of G&K Services Inc. by Cintas.  Based on that information and without telling his friend, Fettner then purchased G&K Services stock in the brokerage accounts of his ex-wife and a former girlfriend, and persuaded his father and another girlfriend to purchase G&K shares.  The complaint further alleges that after Cintas and G&K announced the merger on Aug. 16, 2016, G&K’s stock price jumped more than 17 percent, resulting in illicit profits from Fettner’s misconduct of more than $250,000.

“Those who illegally use confidential information to financially benefit others will be held liable for their misconduct,” said Carolyn M. Welshhans, Associate Director of the SEC’s Division of Enforcement.  “The penalty in this action takes such improper trading profits into account.”

The SEC’s complaint, filed in U.S. District Court for the Southern District of Florida, alleges that Fettner violated Section 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5.  Without admitting or denying the allegations in the complaint, Fettner has consented to the entry of a final judgment permanently enjoining him from violating the charged provisions of the federal securities laws and imposing a penalty of $252,995.  The SEC also named as relief defendants Fettner’s ex-wife and a former girlfriend, who each profited when Fettner used their brokerage accounts to place illicit trades.  The relief defendants consented to the entry of a final judgment agreeing to disgorge those profits with prejudgment interest.  The settlement is subject to court approval.

The SEC’s investigation was conducted by Christopher G. Margand and supervised by David Frohlich and Ms. Welshhans.  The SEC appreciates the assistance of the Financial Industry Regulatory Authority.