FORMER BIO-PHARMA EXEC CAUGHT IN STOCK SCAM! Made $70K PROFIT From Secret Deal!

SEC v. Curt L. Dewitz — U.S. Securities and Exchange Commission Litigation Release No. 26200, dated December 19, 2024.

The SEC charged Curt L. Dewitz, a former executive of a biopharmaceutical company, with insider trading. Dewitz allegedly traded securities of two related public companies based on material nonpublic information about a merger involving his former employer. He has consented to a settlement requiring him to pay disgorgement, prejudgment interest, and a civil penalty, along with an officer and director bar.

In Plain English

Imagine you work for a company and learn a secret about another company that will make its stock price go up. Before the secret is announced, you buy a lot of that other company's stock. When the secret becomes public, you sell your stock for a profit. This is illegal because you used secret information that others didn't have. The SEC caught this person and made them pay back their illegal profits and a fine.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Access to Confidential Information Curt L. Dewitz, a former executive at a biopharmaceutical company, possessed material nonpublic information. This information concerned his former employer's agreement to merge with one of two related public companies.
2. Trading Before Public Announcement Dewitz acted on this confidential information by trading in the securities of the two related public companies. This trading occurred before the merger agreement was publicly announced.
3. Generating Unlawful Profits His trading activities resulted in unlawful profits totaling $70,382.96. This profit was gained by exploiting the market's unawareness of the impending merger.
4. SEC Investigation and Charges The Securities and Exchange Commission (SEC) investigated Dewitz's trading activities. The SEC's complaint, filed in the U.S. District Court for the Northern District of Florida, alleged violations of antifraud provisions.
5. Settlement and Sanctions Dewitz consented to a settlement without admitting or denying the allegations. The settlement requires him to pay back his $70,382.96 in unlawful profits, plus $14,809.53 in prejudgment interest, and a civil money penalty equal to his gains.
6. Future Restrictions As part of the settlement, Dewitz faces an injunction against future violations of antifraud provisions. He is also barred from serving as an officer or director of a public company.

The Enforcement Action

The SEC announced the filing of a settled insider trading case against Curt L. Dewitz, a former executive of a biopharmaceutical company. The Commission’s action alleged that he traded in the securities of two related public companies based on material nonpublic information from his former employer, ahead of a public announcement that his employer had agreed to merge with one of the two related public companies. The SEC’s complaint, filed in the United States District Court for the Northern District of Florida, alleged that Dewitz thereby violated the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission’s action seeks a final judgment ordering Dewitz to pay disgorgement of $70,382.96 in unlawful profits, along with $14,809.53 in prejudgment interest, and a civil money penalty equal to his unlawful gains. The action also seeks to have Dewitz enjoined from future violations of the charged antifraud provisions and barred from serving as an officer or director of a public company. Without admitting or denying the Commission’s allegations, Dewitz has consented to entry of a judgment granting the sought relief. The settlement is subject to approval by the Court.

Named in this action: Curt L. Dewitz.

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