SEC v. Joseph C. Lewis, Carolyn W. Carter, Patrick J. O’Connor, et al. — U.S. Securities and Exchange Commission Litigation Release No. 26489, dated February 24, 2026.
The SEC charged Joseph C. Lewis and associates with insider trading. Lewis allegedly shared material nonpublic information about two companies with his girlfriend, Carolyn W. Carter, and his private pilots, Patrick J. O’Connor and Bryan L. Waugh. These individuals then traded on the information, generating ill-gotten profits. Final judgments were entered against all four defendants, requiring them to pay penalties, disgorgement, and prejudgment interest.
Imagine someone knows a secret about a company's stock before anyone else. This person then tells their friends, who use the secret to buy or sell the stock before the news becomes public, making money unfairly. The SEC stepped in to stop this and make them pay back the illegal profits and a penalty.
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.
The SEC obtained final consent judgments as to Joseph C. Lewis, Carolyn W. Carter, Patrick J. O’Connor, and Bryan L. Waugh in its civil enforcement action. The judgments permanently enjoin the defendants from violating antifraud provisions of the Securities Exchange Act of 1934 and Rule 10b-5. The defendants were ordered to pay penalties, disgorgement, and prejudgment interest. Lewis was ordered to pay a $1,636,645.11 penalty. Carter was ordered to pay $241,154.81 in disgorgement and $43,589.44 in prejudgment interest. O’Connor was ordered to pay $24,221.53 in penalties, $171,886.12 in disgorgement, and $29,257.46 in prejudgment interest. Waugh was ordered to pay $33,126.86 in penalties, $132,507.44 in disgorgement, and $22,554.64 in prejudgment interest.
Named in this action: Joseph C. Lewis, Carolyn W. Carter, Patrick J. O’Connor, Bryan L. Waugh.